Budget plan antes up for Medicaid, schools

Friday, April 19, 2013

Arkansas’ public schools and health-care programs would get most of the money, while state employees would receive a 2 percent cost-of living increase under the state budget proposal that legislative leaders unveiled Thursday night.

The lawmakers and the state’s chief fiscal officer said the proposed budget largely mirrors the $4.9 billion budget that Beebe proposed in November for fiscal 2014. The state’s budget is $4.727 billion in the fiscal year that ends June 30.

“We’ve tweaked it here and there, and added $2 million for the Governor’s Distinguished Scholarships [to head off cutting the number of new recipients by more than 200 in the next school year],” said Sen. Larry Teague, D-Nashville, co-chairman of the Joint Budget Committee.

“The governor always has been pretty good at budgeting,” he said.

The committee distributed copies of the proposed Revenue Stabilization Act to members’ desks Thursday evening to clear the way for the committee to vote on the measure today, Teague said.

It divides the projected funding into A, B and C categories: The first $4.786 billion would go to category A; assuming there’s enough money, the B category would receive the next $131 million. If enough money still remains, $6.65 million would go to category C.

Combined, the three categories total $4.924 billion. Any amount above that would be surplus.

The state’s revenue forecast for fiscal 2014 envisions enough money to fully fund categories A and B, said Richard Weiss, the state’s chief fiscal officer.

“If the economy grows and we up the forecast, then you’d be able to finance [category C],” he said.

The budget presented Thursday deals only with general revenue (including money from sales and income taxes) as opposed to special revenue such as motor-fuel taxes, federal funds and other sources of revenue.

The budget anticipates $10 million in tax cuts in fiscal 2014 and provides for $18 million in rainy-day funds.

Under the proposed budget, the Public School Fund providing state aid to Arkansas’ 239 school districts would increase by nearly $47 million to $2.046 billion. That all would be in the A category.

The Department of Human Services would get a nearly $95 million increase to $1.226 billion, with the state’s Medicaid program getting an $85 million increase to $890 million. All but $1.7 million for Behavioral Health Services would be in categories A and B.

The budget contains no Medicaid service cuts, said Weiss.

Teague said legislative leaders also plan to propose providing $70 million in current surplus funds to the Medicaid program that Beebe requested.

The state’s higher education institutions’ general revenue funding would increase from by $7 million to $736 million with all but $2.6 million in categories A and B. The $2.6 million would go for uncompensated care at the University of Arkansas for Medical Sciences.

The state Department of Correction would get a $14 million increase to $312 million under the budget proposal. The Department of Community Correction would receive a $7 million increase to $76 million.

State employees who don’t work at the state’s higher-education institutions haven’t received cost-of-living raises in fiscal 2012 and 2013 because lawmakers balked at financing the raises. Beebe also recommended providing these more than 30,000 employees a 2 percent cost-of-living raise in fiscal 2014.

Front Section, Pages 1 on 04/19/2013