Governor Offers Arkansas Lawmakers a $4.72B Budget

DALLAS — Arkansas Gov. Mike Beebe sent lawmakers a $4.72 billion general fund spending plan for fiscal 2013 that increases expenditures by $163 million from fiscal 2012.

The budget was presented Tuesday to the legislature’s Budget Committee by Richard Weiss, director of the Office of Finance and Administration.

The budget includes additional spending of $114 million for Medicaid, $56.6 million for public education and $3.6 million for higher education. It calls for total state spending of $1.99 billion on public education, $806 million for Medicaid and $729.6 million for higher education.

The general fund budget is financed almost entirely by the state’s 6% sales and income taxes.

The comprehensive budget for fiscal 2013 totals $24 billion. In addition to general fund spending, the overall budget includes programs and spending financed through federal grants, dedicated fuel taxes and college tuition revenue.

Beebe’s budget assumes fiscal 2013 general fund revenues of $4.73 billion, up from $4.57 billion in fiscal 2012, which ends June 30. The 2013 outlook is down $121.3 million from earlier predictions, Weiss said.

Gross revenues are expected to total $5.9 billion next year, but that includes at least $500 million of income tax payments that will be refunded and $590 million of otherwise dedicated spending. Gross revenue expenditures in fiscal 2013 include $70 million of school desegregation payments and $291 million for education.

Weiss said the revenue forecast provides little flexibility to increase spending. The General Assembly will convene Feb. 13 for its biennial fiscal session, which can last no longer than 45 days.

“It’s going to be another mean, lean year,” Weiss said. “It is a tight budget, a conservative budget.”

Weiss said he expects budgetary pressures in fiscal 2013 from growth in the Medicaid program and from the state’s over-burdened prison system.

“We’re going to have a tough time dealing with correctional growth and we’re going to have a tough time with Medicaid,” he said. “It is going to require a whole lot of hands-on massaging.”

The state had warned of a potential revenue shortfall in Medicaid funding in fiscal 2013, but Beebe said in December that less-than-expected growth had delayed the $250 million problem until 2014.

Beebe will submit up to a dozen requests for supplemental funding through the remainder of fiscal 2012, Weiss said. The additional funds will come from an expected $72 million surplus this year.

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Arkansas
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