LITTLE ROCK — Budget hearings begin Tuesday in advance of the Legislature’s fiscal session, which lawmakers say could not come at a better time with the economy slowly pulling out of a protracted recession and four agencies facing money troubles.
“This fiscal session (comes) at a very good time,” said Rep. Terry Rice, R-Waldron. “We’re in a time in the state of Arkansas that we’ve got to make every dollar count. We’ve got to make it count for the citizens, for their tax dollars to go further.”
Richard Weiss, the state’s chief fiscal officer, is to present Gov. Mike Beebe’s $4.7 billion balanced budget proposal for the 2012-2013 fiscal year Tuesday to members of the Joint Budget Committee and Legislative Council. The second-ever fiscal session convenes Feb. 13.
Last week, Beebe said he would propose nearly $160 million in additional spending, mostly for Medicaid and public education, but that most other state budgets would remain flat.
House Speaker Robert S. Moore Jr., D-Arkansas City, and Rep. Kathy Webb, D-Little Rock, who is co-chairman of the budget panel, both said last week they expect the budget hearings to go smoothly.
Independent reporting for Pine Bluff & Jefferson County since 1879.
Of particular interest, they said, will be a $4 million budget shortfall and misuse of federal funds at the Arkansas Forestry Commission, where 36 employees were laid off Friday.
“I think there will be a very healthy discussion about the problems that the Forestry Commission is experiencing,” Moore said.
The governor has asked lawmakers to approve $2.7 million in supplemental funding to help offset the commission’s shortfall. About $1.2 million would repay federal government grant money that was inappropriately used by the agency for the ongoing expenses, and about $1.5 million would fund the commission operations through the end of the fiscal year.
Sen. Gilbert Baker, R-Conway, co-chairman of the Budget Committee, also said a special subcommittee will be appointed Tuesday to conduct a more in-depth study of the commission’s finances.
Along with the Forestry Commission, the Department of Workforce Services and Department of Career Services, and the budget of the Administration of Justice Fund, have been added to the budget panel’s agenda because of money problems and concerns raised by some lawmakers.
Last year, declining revenues from fewer civil case filings, among other problems, resulted in cash-flow problems that jeopardized pay for state trial court personnel.
In both November and December, Beebe released $40,000 from his emergency fund to keep 124 Arkansas trial court assistants from taking unpaid furlough because of the funding crunch.
In September, a federal Labor Department report was released showing that the state has overpaid jobless benefits by about $161 million over the past three years.
The news did not sit well with lawmakers, and a few days later the director of the state Department of Workforce Services said an in-house review of the report found that the state’s overpayments of unemployment benefits actually totaled $45 million.
The budget of the Department of Career Services was added to the agenda because some lawmakers questioned some of the agency’s spending practices.
“With the huge number of members we have who are new and will be going into their first fiscal session … we felt it was the prudent thing to do to go ahead and get a full discussion of those items during the budget hearings,” Webb said.
Also on the agenda are the budgets of what are referred to as the “the big six” — the Department of Education, Department of Human Services, Department of Correction, Department of Community Correction, Department of Higher Education and the Department of Health.
Another issue likely to draw attention is a $462,000 contract in the state Insurance Department’s proposed budget to plan what the state’s role will be in a federally mandated health insurance exchange.
The governor in December said he endorsed the state’s involvement in a partnership with the federal government to implement the exchange in the state. He also said he signed off on an application by the Insurance Department for a $7.6 million federal grant to plan for implementing the program.
Some Republican lawmakers oppose the move by the Democratic governor, arguing that the state should not spend tax dollars on an insurance exchange while the federal health care overhaul is being challenged in court.
“Yes, there are some questions about this,” Moore said. “This is the governor’s decision to move forward with this. I don’t think it will be a distractive issue.”
The additional funding for Medicaid also will be questioned by some lawmakers.
“Real changes need to be made in the Medicaid system, but the problem is we can’t make those changes in a fiscal session,” said Rep. John Burris, R-Harrison, the House minority leader.
“I think that if that increase gets approved there will be a lot of lawmakers holding their noises to do it,” Burris said, adding he expects an overhaul of the Medicaid system in Arkansas to be debated heavily during the interim and in the 2013 session.
State officials initially had expected a $60 million shortfall in the state Medicaid budget during the 2012-2013 fiscal year. Last month, Beebe said there would be sufficient funding for the next fiscal year, but a shortfall of more than $200 million was expected in the 2013-3014 fiscal year.