Fee, fine drop forces entities to cut budgets

Law school, police, courts among those wielding ax

Friday, March 7, 2014

A 25 percent cut in funds tied to court fines and fees has some state programs and agencies planning to cut staffs, salaries and services to absorb the hit, administrators said Thursday.

The Arkansas Department of Finance and Administration announced in a Feb. 28 memorandum that Administration of Justice Fund distributions will be funded at 75 percent until further notice because of “inconsistent and less than projected” remittance of court fines and fees from district and circuit courts.

The state-mandated revenue is disbursed monthly to the state’s two law schools, numerous court programs, the Arkansas State Police, the state Crime Laboratory and other entities.

The Administration of Justice Fund normally disburses about $3.3 million monthly. At 75 percent funding, excluding four court programs designated as mandatory by the state, that amount would be reduced to about $2.7 million each month.

Brandon Sharp, the Finance and Administration Department’s budget administrator, said the decision was made to reduce the payout after January and February court collections did not rebound from a typically slow November and December.

That decision was based on the fear that the department would be unable to repay a $1.5 million Budget Stabilization Trust loan that had been awarded to supplement cash flows, Sharp said.

“We had to reduce the allocation until we can repay the loan,” Sharp said.

However, Sharp said the state is expecting a rebound in the Administration of Justice Funds this month and April - months in which revenue has historically been about $1 million higher because tax refunds are garnished to pay delinquent fines.

Sharp added that the department is hoping that the loan can be paid off and the funding can be restored after the April revenue collection.

At the University of Arkansas at Little Rock, William H. Bowen School of Law Dean Michael Schwartz has pledged to cut his own salary by $1,000 per month, among other cost-reduction measures. Schwartz earned a salary of about $230,000 in 2013.

The UALR law school’s monthly payments from the fund will be reduced from nearly $112,000 to about $84,000, Schwartz said. He predicted that if the 75percent payout continues throughout the next fiscal year, the college would lose about $336,000.

Schwartz announced cutbacks to faculty and staff at the law school in a two-page memo Wednesday. Schwartz said other cuts will include a freeze on the hiring of a communications director and the elimination of summer research grants and summer teaching by full-time faculty.

“I will take the salary cut until we solve the problem,” Schwartz said. “As long as they can’t get summer research grants, I will take a cut in salary.”

The salary reduction still has not been approved by UALR Provost Zulma Toro, but Schwartz said that if the request is denied, he will instead donate the money to the college.

“It’s my view of leadership that I should do it,” Schwartz said.

The University of Arkansas School of Law in Fayetteville will lose the same amount of Administration of Justice funds each month as UALR. However, Dean Stacy Leeds said a cushion had already been built in to absorb the blow because similar reductions were made last year.

“We have kind of operated our entire year conservatively,” she said. Leeds added that the Fayetteville law school is still expected to carry forward a modest cash surplus at the end of the fiscal year.

Amy Johnson, the director of the Arkansas Access to Justice Commission, said she was not aware of the cuts until contacted for comment by the Arkansas Democrat-Gazette. The commission oversees the fund’s distribution to the state’s two nonprofit legal aid providers, the Center for Arkansas Legal Services and Legal Aid of Arkansas.

The two legal aid organizations usually average about $72,000 per month in disbursements from the fund. The reduction to 75 percent will cause the organizations to lose nearly $17,000 per month.

“It will hit us fairly hard. We will have to lay off an attorney-and-a-half position and freeze hiring,” said Lee Richardson, executive director of Legal Aid of Arkansas.

Jean Carter, the executive director for the Center for Arkansas Legal Services, said budget cuts would mean a reduction in services to the organization’s nearly 30,000 clients, as well as a hiring freeze and possible staff reductions.

“We will just end up having to focus on only the most critical problems of safety and security, like domestic violence or child neglect or abuse,” Carter said.

Neither Richardson nor Carter said they had been notified of the slash in funding until reached for comment by the Arkansas Democrat-Gazette.

Arkansas, Pages 9 on 03/07/2014