Arkansas state budget

Arkansas operates on an annual budget cycle. Its fiscal year begins July 1.

Gov. Beebe signed the $4.7 billion budget Arkansas FY2013 state budget into law on March 5, 2012.^[1] Highlights of the budget include $114 million funding increase for Medicaid and $56 million more for public schools while agency funding remained static.^[1]

Arkansas has a total state debt of approximately $25,020,643,000, when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and 2011 budget gap. ^[2]

Arkansas's total state debt per capita is $8,492.56.^[3]

See also: The Arkansas State Budget on State Budget Solutions

Economic Freedom

A new Fraser Institute report on economic freedom ranks Arkansas 43rd in economic Freedom. Delaware ranks 1st and New Mexico ranks 50th. The study examines the impact of economic freedom on both the level of economic activity and the growth of economic activity. According to the study, the freest economies operate with minimal government interference, relying upon personal choice and markets to answer basic economic questions. More governmental restrictions on those choices curbs economic freedom. The study looks at three major categories per state – size of government, taxes and regulations. ^[4]

Federal Aid to State Budget

The chart below represents how much of the state’s budget comes from the federal government. The number is the corresponding ranking in relation to the rest of the nation (if #1, the state receives the highest percentage of federal funding in the nation):

Figures are calculated by dividing each state’s intergovernmental revenue into its general revenue. Data is available at in U.S. Census.

FY2013 State Budget

Gov. Mike Beebe signed the $4.7 billion FY2013 budget into law.^[5] The budget was nearly identical to the budget Beebe proposed in January. It increases Medicaid funding by $114 million and K-12 public school funding by $56 million. The funding other state agency funding will remain the same as in FY2012.^[5]

The budget was contained in House Bill 1005 found here.

Governor's Proposed Budget

Gov. Beebe proposed a $4.7 billion state budget on Jan. 17, 2012, which increases spending over the prior year by $163 million. ^[6] Many of the reductions come from one-time items in the FY2012 budget that do not continue in FY2013.^[7]

The new money in the governor's proposal included:

• $114 million would be used to pay for growth in Medicaid;^[1]
• $56 million in additional funding for public K-12 schools;
• $2.1 million in increased funding for prisons;
• $3.6 million for some higher education institutions.^[8]

The budget did not include a cost of living raise for state employees. The governor said he thought the raise would be a good idea but he did not know how to pay for it without reducing vital services.^[9]

The legislative fiscal session began Feb. 13, 2012, ^[10] and was designed to focus primarily on budget issues.^[11] The Joint Budget Committee's budget was nearly identical to the governor's proposed budget.^[12] The governor signed the $4.7 billion budget into law on March 5, 2012.^[13]

FY2012 State Budget

On Nov. 10, 2010, Gov. Beebe presented his FY2012 $4.6 billion budget proposal.^{[14][15] [16]}

Agencies may have more funds than expected because the state eliminated hundreds of state cars after an evaluation showed the state had more than 8,000 vehicles in its fleet.^[17]

Education Spending

For FY2012, Arkansas devoted 34.7% of its total spending to education, up from 36.0% in FY2009.^[18]

Governor's Proposed FY2012 State Budget

The governor's proposed FY2012 budget of $4.6 billion is 2.5% higher than that of FY2011, with approximately $109 million more in spending.^[14]

The budget's only tax cut would be to reduce grocery taxes by half a percent, from 2% down to 1.5%.^[14] The budget calls for $55 million more for public schools, an increase of 2.9%, and increasing the Human Services budget by nearly $6 million, around 0.6%.^[14] It also provides state employees with a 1.86% cost-of-living increase in pay, which will cost about $23 million.^[14]

Budget transparency

• Evaluation of Arkansas state website
• See also: Constitutional provisions regarding reading of bills
• See sample transparency legislation at the Sunshine Standard

Arkansas does not have a constitutional provision providing a period of legislative review before the legislature can vote on a budget bill.

Arkansas launched its statewide, official spending database online here on July 6, 2012.^[21] The Department of Finance and Administration has created a statewide contracts procurement Web site.

The good

• Site has a search function and is easy to navigate.
• Expenditures are updated daily.^[22]
• Revenues are listed by source, type, agency and functions.^[23]
• Employee salaries are listed and updated monthly.^[24]
• Budget is published.^[25]
• Elected officials are listed with contact information under their respective office.^[26]
• Administrative officials are listed with contact information under respective agencies.^[27]
• Information on the state ethics commission is provided.^[28]
• State tax information is posted.^[29]
• Annual financial audits are published.^[30]
• Statewide contracts are published, with standard contracts in excess of $25,000 published, construction contracts in excess of $20,000 published, and single purchase orders in excess of $25,000 published.^[31]

The bad

• Full text of the Arkansas Freedom of Information Act is posted, but no form/contact information for requesting records is provided.^[32]
• Only provides lobbyist forms^[33], no information on state paid lobbying or database of registered lobbyists.

Legislation

In 2011, the State approved a proposal by Lieutenant Governor Mark Darr to create a state "online checkbook." The website, which will contain information on all state expenditures, had an upfront cost of $550,000 for the initial creation of the site. Ongoing site operations are estimated at $250,000 annually.^[34] The Lt. Gov.'s statement upon implementation of the online checkbook can be found here.

Government tools

The following table is helpful in evaluating the level of transparency provided by the state on budget and spending related activities. Arkansas does not have a specific state spending and transparency database, but it does provide spending information on its government website:

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
Arkansas Department of Finance and Administration	Y	P	P	N	Y	P

• The website has a search function.^[35]
• State contracts are posted, but dollar amounts are not included.^[36] Current bids and potential awards are listed. ^[37]
• Grant programs are listed, but specific information on them is not.^[38]
• Agency budget totals are available. ^{[39] [40] [41]}
• Line item, actual expenditures are not published.
• Public employee salaries are not available. Pay schedules are posted. ^[42]

Independent transparency sites

None.

Multi-Measure Budget Transparency Profile

The Institute of Government and Public Affairs at the University of Illinois has created a multi-measure transparency profile for Arkansas, which measures state transparency as of September 2011 using indicators from a range of organizations, including Sunshine Review. These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.

Budget Background

Arkansas’ Revenue Stabilization Law (Act 311 of 1945) requires the state to designate budget funding to be prioritized into 3 categories: A, B-1, and B. FY 2010 budget funded all A level budgets 100% with partial funding for B level budgets at 54%. New programs must start in the B category. This innovative model has been credited with keeping the state’s budget deficits low and manageable during difficult times.^[43]

Arkansas voters approved a constitutional amendment in November, 2008 requiring annual legislative sessions and appropriations no longer than 1 fiscal year effective in 2009.^[44] Previously, Arkansas’ legislature met and budgeted on a biennial basis. Annual budget began in FY2010.^[45]

The budget schedule requires the Governor to submit his budget to the Legislature in November before they convene. The Legislature meets January to April (January 12 to May 1 in 2009) and needs a three-fourths majority to pass the budget. The fiscal year begins July 1st and ends June 30th.^[46]

When crafting the state budget, state agencies project what funding is needed to operate their programs and those funding requests are then divided into three categories: A, B and C.

• Category A is essential programs, including education, corrections, public assistance, transportation and Medicaid.
• Category B is cost-of-living increases for all agencies, necessary expansions of programs like Medicaid, and new programs that fill a critical need. The state’s $10 million community corrections project, for example, went into this category.
• Category C is a wish list of new programs lawmakers and agency heads would like to start.

Funding goes first to the items in category A, and then on to category B, and if anything is left over, some C projects may get funded. If revenues fall short of initial projections, the chief fiscal officer can make across-the-board cuts — first from C, then from B, and lastly from A.^[47]

See Arkansas state budget (2008-2009) for more information.

Accounting Principles

The Arkansas Division of Legislative Audit is responsible under the Legislative Joint Audit Committee (A.C.A. 10-3-407)^[48] for independent auditing of state and local entities.

Roger A. Norman is Legislative Auditor. Audit reports are published on the division’s Web site.^[49]

Arkansas currently has no statewide, official spending database online. However, the Department of Finance and Administration has created a statewide contracts procurement Web site.

Stimulus

Arkansas received $1.3 billion in federal funding.^[51]

Public Employees

According to 2008 Census data, the state of Arkansas and local governments in the state employed a total of 190,155 people.^[52] Of those employees, 155,216 were full-time employees receiving a net pay of $478,078,745 per month and 34,939 were part-time employees paid $24,804,627 per month.^[52] More than 40% of those employees, or 32,278 employees, were in education or higher education.^[52]

See Also

• Arkansas government sector lobbying
• Arkansas public pensions
• Arkansas state government salary

External links

Additional reading

• The City Wire,"December jobless rate up to 7.7% in Arkansas," January 22, 2010
• Associated Press,"Gov. Beebe Agrees to Cut Arkansas Budget by $106M," January 11, 2010
• The City Wire, Arkansas’ budget issues less severe than most states, August 1, 2010

References

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	v • d • e State of Arkansas Little Rock (capital)
Transparency	Arkansas Freedom of Information Act | Open Meetings Law | Government corruption reports | Transparency Legislation | FOIA procedures | Transparency Advocates |
Divisions	State | List of counties | List of Cities | List of School Districts | Evaluation of State website | Evaluation of county websites | Evaluation of city websites | Evaluation of school district websites |
Government	Arkansas State Constitution | Executive | House of Representatives | Senate | Local officials | Public school system |
State spending	State budget | State salaries | Stimulus allocations | Taxpayer-funded lobbying |
Judiciary	Arkansas Supreme Court | Arkansas Courts of Appeal | Circuit Courts | District Courts | Arkansas City Courts | Judicial News | Judicial selection in Arkansas |
Ballot Measures	Ballot measures | Ballot measures by year, from 1912-2008 | Arkansas 2008 local ballot measures | Initiative laws | Campaign finance requirements | Laws governing the initiative process |