$7 million OK'd for UAMS' year

Legislators back budget lift

A legislative committee Thursday signed off on transferring $7 million in rainy-day funds to the University of Arkansas for Medical Sciences in the fiscal year starting July 1, but the school will still see a sharp drop in state funding because of legislative budget cuts.

UAMS, one of the state's largest employers, is getting $94 million in state general revenue in fiscal 2014, which ends June 30. In fiscal 2015, it's scheduled to get $86.4 million. Without the increased money, it would be eligible to receive only $79.4 million.

The rainy-day funds are intended for use by UAMS for teaching needs in the next fiscal year, Democratic Gov. Mike Beebe said in a letter distributed to the Legislative Council's Performance Evaluation and Expenditure Review Committee.

UAMS' enrollment has increased by 215 students to 2,867 students during the past five years, yet its state general-revenue appropriation declined by about $12 million during the same period, UAMS Chancellor Dan Rahn said.

The $7 million will be used to support UAMS' academic programs and research, he told lawmakers.

"This is not having to do with all the disruptive change and everything that is happening in the academic medical center and in the clinical assistance side," Rahn said, referring to the changes in the health-care system.

In this year's fiscal session, the Republican-controlled Legislature and Beebe told UAMS it would have to demonstrate it truly needed extra funding before it would receive any rainy-day funds.

The increased money was conditioned on approval from the governor and the Legislative Council, which is expected to endorse the move, to which there was no opposition.

Beebe had originally proposed cutting UAMS' budget by $7.6 million, but legislators made sharper cuts. The rainy-day funds bring the budget back to what Beebe had proposed.

Because of the federal Patient Protection and Affordable Care Act, including state's use of federal Medicaid dollars to purchase private health insurance for low-income Arkansans, Beebe maintained that UAMS would see fewer uninsured patients who couldn't pay for their treatment.

After he departed the committee's meeting, Rahn noted that UAMS built the $7 million in rainy-day funds into its budget for fiscal 2015.

Without the added money, jobs would be at risk, Rahn suggested.

"Without this, we would be going back in and we would have to make more cuts, and two-thirds of our budget is personnel," he said.

UAMS also is grappling with about a $7.5 million cut in funding from the federal National Institutes of Health and about a $3 million cut in Medicare payment rates, he said, "so there is a lot of downside."

The state's private option, the name for the state's use of the Medicaid money for market purchases of insurance policies, "is having a very positive effect on the health-system side, but the downside exceeds the upside," Rahn said.

The committee also approved the transfer of $6.6 million in rainy funds to the state Department of Human Services' Children and Family Services Division in fiscal 2015.

After the committee's meeting, Human Services Department spokesman Amy Webb said the rainy-day funds will be used to match federal funds under a waiver that the federal government has granted to the state. It allows the department to use the federal funds in more flexible ways with the aim of reducing the number of children entering foster care.

The rainy-day funds will be used to cover things such as staff, services to families, treatment for families, and foster-parent recruitment efforts and needs, said Kate Luck, another spokesman for the department.

The committee also approved transferring $89,000 in rainy-day funds to the state Department of Finance and Administration for a contribution to the Southern Governors Association in fiscal 2014, $31,000 in rainy-day funds to the department for a contribution to the Southern Governors' Association in fiscal 2015, and $120,000 in rainy-day funds to the UA System for the Center for the Advancement of Leadership Skills' Southern Legislative Conference expenses in fiscal 2015.

The Southern Governors Association, chaired by Beebe, has set its annual meeting in Little Rock from Aug. 14-17.

The Southern Legislative Conference, chaired by Sen. Keith Ingram, D-West Memphis, is to hold its annual meeting in Little Rock from July 26-30.

Metro on 06/06/2014

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