The state Department of Veterans Affairs would receive $7.5 million in state surplus funds to help build a new veterans home under bills that cleared the Legislature’s Joint Budget Committee on Friday.
The measures distribute the state’s surplus funds of $300 million.
Rep. John Edwards, D-Little Rock, said the $7.5 million would represent the state’s 35 percent share of matching funds needed to obtain a grant from the U.S. Department of Veterans Affairs to help construct a veterans home projected to cost about $21 million.
“I think we are in the driver’s seat,” he said.
Sen. Jane English, R-North Little Rock, said the state’s financial commitment for the project needed to be made by August for the federal government to start processing its application for a grant or “even put us on a list.”
The bills providing the surplus funds are Senate Bill364 by the Joint Budget Committee and House Bill 2232 by a committee co-chairman, Rep. Duncan Baird, R-Lowell. The measures would distribute money in the state’s General Improvement Fund from the state’s surplus.
Another committee co-chairman, Sen. Larry Teague, D-Nashville, said Gov. Mike Beebe would get about $100 million to spend on state projects and the House and Senate would each receive $35 million for their favored state projects under the measures.
All 35 senators received about $1 million apiece to distribute on projects, he said.
State lawmakers provided funding for projects ranging from $97,500 for a grant at Camp CouchDale southeast of Hot Springs to $245,000 for a grant for the Arkansas World Trade Center in Rogers to $1.05 million for construction projects at Arkansas State University, according to a list released by the House late Friday.
SB364 and HB2232 also provide $107 million in onetime funding to the state’s Medicaid program.
To meet Beebe’s request for $140 million in one-time funding for the program in fiscal 2014 and 2015, the Legislature also approved House Bell 1219 to transfer $33 million in interest income from tobacco settlement money in the Healthy Century Trust Fund to the program, said Kim Arnall, an assistant director of research for the Bureau of Legislative Research.
Beebe recommended the Legislature provide the $140 million Medicaid allocation shore up the program.
SB364 and HB2232 also include funding for $28.3 million in projects at the state’s higher education institutions, $13 million in lease payments for the state Department of Correction, and $8 million to bolster the catastrophic fund for teacher health insurance benefits, Arnall said.
Earlier Friday, the Joint Budget Committee, with nary a question, recommended approval of bills increasing the state’s general revenue budget by $197 million to $4.924 billion in the fiscal year starting in July.
The identical measuresraising the general-revenue budget are Senate Bill 22 by the Joint Budget Committee and House Bill 2233 by Baird
SB22 and HB2233 are similar to Democratic Gov. Mike Beebe’s proposed $4.947 billion budget - up from the current budget of $4.727 billion - with the public schools and the Medicaid program getting most of the proposed increase.
“Any budget is a compromise and any budget is a product of all the members that are here, and this budget reflects that,” Baird told reporters after the budget committee approved the two bills.
“I don’t know that I could really characterize it as liberal, conservative, fat [or] lean. I think you just kind of have to look at the process and say it is kind of a result of where we started, what we went through, and where we are today,” he said.
This year, Republicans control the state House and Senate for the first time in 138 years.
The proposed budget provides for the first cost of living raise for more than 30,000 state employees who don’t work at the state’s higher-education institutions, for the first time three years.
They would get 2 percent raises in fiscal 2014.
The total cost of the 2 percent raises for those employees will be $30.3 million - including $11.9 million in general revenue - in fiscal 2014, said state budget administrator Brandon Sharp.
The average annual salary for those employees is $38,725, and a 2 percent raise would increase that by $774, he said.
Lawmakers declined to give the state workers cost-of-living raises in fiscal 2012 and 2013.
SB22 and HB2233 divide the projected general revenues into A, B and C categories with the first $4.786 billion going to the A category, the next $131 million to the B category and the next $6.65 million to the C category.
The three categories total $4.924 billion. The state’s revenue forecast for fiscal 2014 fully funds categories A and B, and tax collections beyond that could cover Category C.
The proposed budget factors in $10 million in reduced revenue from tax cuts in fiscal 2014 and $18 million in rainy day funds.
Under the proposed budget, the Public School Fund providing state aid for the state’s 239 districts would increase by nearly $47 million to $2.046 billion. That would all be in the A category.
The state 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 the department’s Behavioral Health Services Division would be in Categories A and B.
Beyond that $1.7 million, Category C also includes $2.6 million for the University of Arkansas for Medical Sciences, $1.587 million for the state Health Department and $687,500 for the state Department of Correction.
Beebe said the funding in Category C would be aimed at partially covering uncompensated medical care at these agencies for a half year. One of the advantages of the “private option,” using federal Medicaid dollars to purchase private health insurance for about 250,000 uninsured Arkansans, is the reduction in uncompensated care costs for the state, Beebe added.
The funding for the state’s higher education institutions would increase by $7 million to $736 million with all but the $2.6 million for uncompensated care at UAMS in Categories A and B.
The proposed budget would cut the University of Arkansas for Medical Sciences’ budget from $95.6 million to $94 million. UAMS would get $90.4 million in the A category, $1 million more in the B category and then $2.6 million more in the C category - ifC category money becomes available.
But UAMS Chancellor Dan Rahn said that “this cut in our core academic operating budget is disappointing especially at a time when UAMS is being challenged to educate more health care professionals to meet the needs of the future.
“This cut will make that task more difficult. This is money we use to support the education of doctors, nurses, pharmacists and other care providers. We are just learning of this now, and how we will make the necessary adjustments is still to be determined. We understand the challenges that the state is facing and that the Governor and the General Assembly are trying to address them. UAMS specifically is facing significant challenges that are further complicated by cuts at the federal level,” he said.
But Senate President Pro Tempore Michael Lamoureux, R-Russellville, said he would understand Rahn’s concern if UAMS only receives funding for Category A in fiscal 2014.
But he said he expects state tax collections to fully fund Categories A, B and C for UAMS in fiscal 2014.
Plus, Lamoureux said he expects UAMS to receive several millions in surplus funds from the state.
Front Section, Pages 1 on 04/20/2013