Legislative issues: : Cuts planned for state agencies
Posted on Wednesday, June 25, 2008
When the state fiscal year begins on July 1, state government agencies will reduce their planned budgets by $ 106. 8 million in anticipation of an expected slowdown in revenue collections.
Some of the major agencies affected will be the Correction Department, which operates state prisons, and the Community Correction Department, which supervises probation and parole programs as well as drug courts.
The State Police and the Department of Human Services will not fill some vacant staff positions. Also, some institutions of higher education will not fill vacant staff and faculty slots and will hold down other expenses, in order to balance their budgets for Fiscal Year 2009.
Arkansas state government lives within its means, unlike the federal government, which routinely spends more than it brings in through deficit spending. The Arkansas legislature prioritizes spending in a bill called the Revenue Stabilization Act. The budget cuts for Fiscal Year 2009 will reduce proposed expenditures in the lowest-priority category.
Planned spending in the high priority category will not be affected by the decision to lower budgets. If economic activity declines further, more budget cuts would be necessary so that state government does not spend more than it brings in.
Budgets for Fiscal Year 2009 were written and approved during the 2007 regular session of the legislature. The Arkansas General Assembly meets in regular session once every two years. Therefore, in each regular session, state budgets are approved for a two-year cycle called a biennium.
Arkansas elected officials, no matter where they fall within the political spectrum, tend to budget conservatively because of the restrictions of the Revenue Stabilization Act and because of the necessity of budgeting two years in advance.
The current administration, by its own admission, budgets even more conservatively than has been the custom in recent decades. That is why state agency directors were instructed in April to begin preparing for the budget cuts that will take effect in July. Rather than wait for revenue collections to slow down, agencies were told to anticipate a slowdown.
If economic activity picks up, budgets can always be restored to previous levels. State budget officials and veteran legislators know that itís easier to restore budget cuts than it is to reduce budgets under the duress of declining revenue.
A proposed constitutional amendment will be on the November ballot that would authorize the legislature to meet every year in order to write annual budgets. In the sessions that would occur in even-numbered years the legislature would only be able to consider budget bills.
Regular sessions now cannot exceed 60 days unless extended by a resolution. The budget sessions would not exceed 30 days, unless extended by a resolution requiring a 75 percent majority of each chamber of the legislature. The extension could not last more than 15 days.
The legislature in its 2007 regular session referred the amendment to voters. The argument for annual sessions is that it would make budget decisions more timely.
If you have any questions or comments about legislative issues, please contact me at HendrenK @ arkleg. state. ar. us or call me at 479-787-6500, extension 30.
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