Arkansas state budget (2008-2009)
From Sunshine Review
Contents |
Unlike most states Arkansas is in "relatively good shape" and is not expected to have a budget gap for fiscal year 2009. However, reports predict a $146 million deficit for fiscal year 2010. [1] Former Rep. Keven Anderson lauded Gov. Mike Beebe for maintaining a "fairly conservative budget" and the continued maintenance of Rainy Day funds, which Anderson noted will prevent the increase of taxes during tough economic times.[2] Despite budget cuts throughout the country, Gov. Beebe called for increased funding for education and noted that saved funds will help cover gaps in Medicaid and the prison system. However, the Governor noted that Arkansas is not necessarily out of the woods, in fact it is expected that northwest Arkansas' economy might get worse due to a slowdown in growth. [2]
[edit] Impact of budget woes
- Main article: State budget crisis, 2009-2010
- Due to a slowdown in tax revenues the University of Arkansas saw a decrease of $5 million less than what was budgeted for 2008. However according to state figures FY 2010's budget will restore half of what the university lost the last fiscal year. [3]
- In 2008 the Governor asked all state departments to submit to a seven percent budget reduction. The Community Corrections Department chose to slash residential treatment over layoffs. It cut the $3 million program in half. [4] However, officials said that revision of the recommended budget and inclusion of the incoming federal stimulus dollars could mean the continued funding of a number of programs that have been considered for possible reduction or elimination.[5]
- For the first time since August 2008 Arkansas saw an overall rise in the state's economic index, however the index still remains relatively low. Creighton University economics professor Ernie Goss said,"Over the past year, the state's transportation equipment industry has been battered by the global recession," Goss said. "This will be the turnaround industry for Arkansas." February 2009's index was 29.3 compared to January's 25.8. A figure greater than 50 represents economic growth in the next three to six months. [6]
[edit] Budget background
The Arkansas fiscal year begins July 1 ends June 30 however, the biennial period is a two year period that usually begins July 1 of the odd-numbered year and ends June 30 of the next odd-numbered year. Effective January 1,2009 the state legislature is required to meet every year on the second Monday in January. Additionally a bill other than an appropriation bill may be considered in a Fiscal Session if two-thirds of the members of both the House and the Senate approve consideration of the bill. However, before the budget is considered by both houses, first the state's agencies make individual recommendations to the Governor, whom proceeds to review the requests along with estimated revenue data for the upcoming biennium or fiscal year. [7] [8]
[edit] Budget figures
The following table provides a history of Arkansas' expenditures and gross domestic product (GDP).
| Fiscal Year | Expenditures (billions) | GDP (billions) |
|---|---|---|
| 2000 | $15.4 [9] | $64.3 [9] |
| 2001 | $16.3 [9] | $66.0[9] |
| 2002 | $12.2[9] | $66.8 [9] |
| 2003 | $15.5 [9] | $75.7 [9] |
| 2004 | $16.3 [9] | $82.1 [9] |
| 2005 | $17.2 [9] | $86.1 [9] |
| 2006 | $18.5 [9] | $90.9 [9] |
| 2007 | $19.8 [9] | $95.4 [9] |
| 2008 | $21.3 [9] | $100.1 [9] |
| 2009 | $22.9* [9] | $105.1* [9] |
- NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
[edit] The state of the economy
Gov. Mike Beebe 2009 State of the State Address |
- According to state officials the Health Department is need of additional revenue due to increases in medical care, staff recruitment, and pharmacy services. Additionally the state department has seen an increase in patients that don't pay for the services because they aren't covered by insurance and aren't eligible for Medicaid or Medicare.[10]
- According to state officials state revenues were $41.5 million over budget in February 2009. Chief financial officer Richard Weiss said the current projections for 2009 would hold steady which makes officials said it is likely that Governor Beebe's proposed 1-cent cut to the state's grocery tax could be supported.[11] However, despite increased revenue Weiss said February 2009's numbers consisted mainly of income tax paid on severance packages of laid off workers. [12]
- Net available revenues totaled $207.3 million, $16.4 million above last year and $41.5 million above forecast. Gross general revenues totaled $396 million, $20.7 million above last year and $30.2 million above forecast.[11]
[edit] Proposed actions
[edit] Governor Mike Beebe
Arkansas is anticipated to have a $310 million surplus for FY 2009. The Governor is recommending that $4 million go toward reimbursing county jails and maintaining in-home health services. However, in order to reduce deficits in the FY 2010 budget Beebe said that he recommends using no more than $60 million from the surplus for education, Medicaid and prisons. The total FY 2010 budget is estimated at $4.47 billion. In total Beebe is recommending $4.3 million in supplemental appropriations.[10]
[edit] Republicans
Republicans throughout the state said that they are opposed to the Governor's cigarette tax that will go into effect March 1, 2009."Raising taxes while we have a $300 million surplus is the wrong thing to do," House Republican leader Bryan King said prior to the approval of the cigarette tax. "This tax-and-spend governor needs to understand that we don't need to raise taxes."[13]
[edit] Democrats
Some Democrats said that although the federal economic stimulus package may help "plug some holes" in the state's budget they are wary of the funds. Rep. Bruce Maloch said,"I think the government that's closest to the people can best decide how to spend the money and how to best stimulate the economy. The package is geared more toward the Californias and Ohios and Michigans ... the ones that have the huge deficit problems." Sen. Shane Broadway recommended that the state use the funds to fund infrastructure and equipment rather than on-going projects because the funds will not last forever, he said. [14]
[edit] Economic Stimulus Package
Arkansas is expected to receive approximately $2.1 billion from the $787 billion economic stimulus package. According to White House officials the stimulus bill is estimated to create or save 31,000 jobs.[15] Gov. Beebe said that a state run website is being created to track Arkansas' use of the federal stimulus money. "This is your money — and your leaders should be held accountable for how it is managed," he said. [16]
According to preliminary reports Arkansas is expected to receive:[17] [18]
- $325.5 million for state infrastructure projects
- $26 million is directed to transportation-enhancement projects and metropolitan planning projects
- $117.7 million is obligated to "shovel-ready projects"
- $7 million for Head Start
- $1 million for the national school lunch program
- $444 million for Kindergarten through 12th grade school modernization, renovation or repair
- $857,000 for senior meal programs
- $39.2 million to fund state government energy technology research and development programs
- $730 million for Medicaid
[edit] Budget transparency
Arkansas currently has no statewide, official spending database online. However, the Department of Finance and Administration has created a statewide contracts procurement Web site.
HB 1053, known as "The Open Checkbooks in Government Act" would have created an online database of state expenditures. Unfortunately, HB 1053 died in committee.[19] "See proposed changes to Arkansas FOIA for more information.
[edit] Legislation
None.
[edit] Government tools
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:
| State Database | Searchability | Grants | Contracts | Line Item Expenditures | Dept/Agency Budgets | Public Employee Salary | Exemption Level |
|---|---|---|---|---|---|---|---|
| None | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
[edit] Economic Stimulus Transparency
- The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.[20]
- Arkansas will receive an estimated $2.1 billion. [15]
- The economic recovery website to show how legislators and government officials in Arkansas are spending Federal funds is available here.
[edit] Independent transparency sites
None.
[edit] Public employee salary information
None.
[edit] See Also
Arkansas taxpayer-funded lobbying
[edit] External links
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- Arkansas Policy Foundation
- Arkansas Department of Finance and Administration
- Arkansas Government spending
[edit] References
- ↑ Center on Budget and Policy Priorities,"State budget troubles worsen," February 10,2009
- ↑ 2.0 2.1 Northwest Arkansas' News Source,"State makes best of tough times," February 15,2009
- ↑ The Morning News,"Beebe: higher education first in line for budget restoration," February 11,2009
- ↑ Today's THV,"Judge Fears Crime Could Rise Due To Budget Cut," February 21,2009
- ↑ Winfield Courier,"Secretary says revised budget will keep prison open," March 3,2009
- ↑ Associated Press,"Mid-America survey state by state glance," March 2,2009
- ↑ State of Arkansas,"Budget Process," retrieved March 3,2009
- ↑ State of Arkansas,"Office of Budget," retrieved March 3,2009
- ↑ 9.00 9.01 9.02 9.03 9.04 9.05 9.06 9.07 9.08 9.09 9.10 9.11 9.12 9.13 9.14 9.15 9.16 9.17 9.18 9.19 US Government Spending,"Arkansas State and Local spending," retrieved March 3,2009
- ↑ 10.0 10.1 Northwest Arkansas' News Source,"Beebe: Fill budget gaps with expected surplus," February 9,2009
- ↑ 11.0 11.1 WXVT,"Ark. revenues up almost $42M in February," March 3,2009
- ↑ Arkansas News,"Revenue report holding, fiscal officer says," March 3,2009
- ↑ Associated Press,"Ark. GOP tries combative style against tobacco tax," February 9,2009
- ↑ Associated Press,"Federal stimulus offers hope, confusion in Ark.," February 23,2009
- ↑ 15.0 15.1 Associated Press,"Stimulus estimates for Arkansas range from $2.1 billion to $4 billion," February 23,2009
- ↑ Baxter Bulletin,"Gov. Mike Beebe:Web site to track stimulus money," February 28,2009
- ↑ Associated Press,"Arkansas to get $351.5 million for infrastructure," February 25,2009
- ↑ Arkansas Matters,"Arkansas' Share of Stimulus Package," February 23,2009
- ↑ Arkansas Legislature, Status of HB 1053
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
| |||||||
