Arkansas General Assembly convenes to consider Gov. Sanders' budget proposal

The Arkansas General Assembly kicked off the 2024 fiscal session for the upcoming budget year with Gov. Sarah Huckabee Sanders calling for continued focus on education reform.

Sanders' proposed budget includes a 1.76% increase over last fiscal year — an amount she said is "far below the 3% year-over-year increase our state has averaged in the recent past."

The General Assembly will review the proposal and consider changes while potentially taking up limited legislation during this session.

This fiscal session is expected to run less than a month. Fiscal sessions are held in even-numbered years are mainly meant to pass budget and spending measures. Lawmakers will also designate a speaker of the House and president pro tempore of the Senate.

Lawmakers might also take up bills to raise the minimum and maximum pay for state employees and to address a controversial law from last year banning local regulation of crypto mining facilities.

Here are some things to know about this year's proposed spending plan:

Will there be changes to Gov. Sanders' proposed budget?

Members of the Joint Budget Committee, who met Wednesday and Thursday, said they don't expect any major objections to Gov. Sanders' proposed budget, which she outlined Wednesday in a State of the State address at the state Capitol in Little Rock.

Governor Sanders emphasized that her budget priorities are on essential public services and the LEARNs Act, an omnibus bill passed in March 2023 that increases state vouchers for private and parochial school tuition and increases teacher bill among other changes.

"Send me a budget that funds critical services for Arkansans while slowing the growth of government,” that “continues to fully fund the LEARNS Act,” and that “funds our police, and I will sign it," Sanders told the General Assembly on Wednesday.

Sen. Jonathan Dismang, R-Beebe, co-chair of the Joint Budget Committee has said publicly that he doesn’t expect to see many major changes to the budget that Governor Sanders’ proposed herself.

Sen. Justin Boyd, R-Fort Smith, who also sits on that committee, concurred with Dismang on Wednesday that any big shakeups to line items are unlikely. But he said that, if there were to be any changes, they might include increases to public safety and Medicaid funding.

“Public safety grants of some sort could definitely be an item there," he said. "There could be something that pops up in Medicaid or [the Department of Human Services] that we feel like needs to be funded differently. [But] I wouldn’t expect that to be a major deviation.”

Agency secretaries have already had an opportunity to come before the Legislative Committee, which meets even when the General Assembly is not officially in session, he said. The committee “had pre-budget hearings already, so we've already been through the process.”

How long will the fiscal session go on?

Dismang and a handful of other legislators said that they don’t expect the session to run longer than three weeks, though rules allow for 30 days with the possibility of an extension.

Boyd agreed with that assessment, saying that, as the General Assembly has held more fiscal sessions over the years, they’ve tended to get shorter, especially since the COVID pandemic.

“This is our eighth fiscal session,” said Boyd. “We've learned a lot about how to be more efficient and effective.”

The shortest fiscal session the General Assembly ever had was in the spring of 2020, Boyd said: “We learned a lot in that session about what we really needed to do and what we didn't need to do as much of.”

He said he anticipates there being 10 or 12 working days in the course of a three-week period.

The $6.7B budget proposal by the numbers

• Total budget: $6.7 billion

• Increase over last fiscal year: 1.76% or $109 million

• Total cuts: $16.3 million (though some of these might be offset by transfers of funding within or between departments or agencies)

• Projected surplus for fiscal year 2024: $240.5 million

• Projected surplus for fiscal year 2025: $376.7 millon

Education reform spending increased, public school funds cut

The vast majority of the 1.76% spending increase is from nearly $66 million, or more than 200%, added to the Children’s Education Freedom Account, which provides taxpayer dollars for private and parochial K-12 education.

Public funding for higher education in Arkansas, meanwhile, would be reduced by more than $2.4 million under a performance-based funding model.

Nearly all of the schools in the University of Arkansas system would each see funding cuts in the hundreds of thousands of dollars, along with cuts for two-year state institutions.

University of Arkansas-Fayetteville was the only four-year state university campus that saw its funding increase in the budget proposal — by modest a 0.29%.

University of Arkansas-Pine Bluff, an HBCU, will have its funding cut by more than $4.2 million, or 16%. However, it will also receive $5.8 million in state matching funds as is required by federal law because of its status as a land-grant university.

More: Arkansas higher education faces reduction in Gov. Sarah Huckabee Sanders budget proposal

Department of Human Services up $4.5M

The Department of Human Services would see an increase of nearly $4.5 million, for a total of more than $1.8 billion.

A line item titled "administration" would receive an increase of close to $4.2 million, or 17%, which the Democrat Gazette reported is accounted for by the transfer of the Temporary Assistance for Needy Families program to Human Services from the Division of Workforce Services.

Other major increases include more than $100,000 for developmental disability services and almost $60,000 for behavioral health. Children and Family Services would get an additional $43,000.

Raises added to the State General Government Fund

The State General Government Fund, which includes the Departments of Correction, Agriculture, the Military, Education and Labor and Licensing, among others, would see an increase of almost $2 million.

The largest changes would be raises of more than $500,000 for the Divisions of Correction and Community Correction as well as over $100,000 each for the Economic Development Commission and the Department of the Military.

Major changes to funding for other agencies

The Division of Workforce Services’ New Hire Registry would lose more than 95% of its funding, or more than $3.5 million under the new budget.

Heather Paul, a representative from the Department of Human Services, said on Thursday that the registry is meant to deter unemployment insurance fraud by keeping track of new hires reported by employers in the state.

She said it’s possible that the functions of the registry could be folded into other databases such as the Tax 21 system at the Division of Workforce Services as part of “streamlining.”

The Division of Arkansas State Police would see a funding increase of almost $3.9 million, or more than 4%.

The Department of Health would receive an additional $108,000 over last year.

This article originally appeared on Fort Smith Times Record: Arkansas General Assembly convenes to consider Sanders' budget plan