DALLAS — Arkansas’ $4.6 billion fiscal 2012 budget unveiled by the Joint Budget Committee on Monday increases appropriations for public education and penitentiaries, but keeps other state spending at or below fiscal 2011 levels.
Total general fund spending during the fiscal year that begins July 1 is $117 million more than in fiscal 2011.
The joint Senate and House budget measure, which consists of identical amendments to SB 732 and HB 1818, divides spending into a high-priority category totaling $4.56 billion and a low-priority category of $31.9 million.
If fiscal 2012 revenues are sufficient after category A priorities have been completely funded, category B spending can occur. Any revenue above the budgeted $4.6 billion would go into the state surplus for allocation by the next General Assembly.
The budget bill is officially known as the Revenue Stabilization Act.
The state’s 239 local school districts will share $1.94 billion from the Public School Fund, up just slightly from the current $1.89 billion.
The Department of Corrections would get $296.7 million, an increase of $6 million next year, with $70.4 million for the Department of Community Corrections, an increase of $4 million. Those two are the only two agencies that will receive significantly more money next year than this year, according to Sen. Gilbert Baker, R-Conway, chairman of the joint committee.
“Every thing else is flat or reduced,” he told reporters after the budget measure was distributed to committee members.
“We have been able to maintain services, cut taxes, and we have a balanced budget,” Baker said. “With the current economic times in most states, that’s a good thing.”
Higher education funding is flat, with an increase of $500,000 in category A funding to $725.9 million and another $7.5 million in category B.
Baker said the general fund spending plan is a compromise between lawmakers and Democratic Gov. Mike Beebe. The governor wanted to limit tax cuts in the current measure to his proposal to reduce the state’s 2% sales tax on groceries by 1.5%, but Beebe agreed to sign several other tax-cutting bills.
The tax cuts will lower general fund revenue by a total of $35 million a year. Beebe’s grocery-tax rate reduction is expected to cut fiscal 2012 revenue by $15.5 million.
“My preference would have been to do the sales tax on groceries only, but I’ve said before, this is a give-and-take process,” he said.
The compromise budget does not provide for Beebe’s proposed 1.86% cost of living increase for 300,000 state workers. The raise would have cost $9 million.
The expected $50 million state surplus in fiscal 2011 is divided, with $40 million to the governor for one-time expenditures and $10 million for legislators to allocate.
“We are going to spend $50 million on statewide needs — economic development, higher ed, statewide water needs, projects like that,” he said.
Baker said the governor would probably use $25 million from his share as timely incentives to lure new jobs to the state or retain existing jobs.
“We’re giving the governor a lot of flexibility,” he said.
