Gov. Asa Hutchinson revealed his budget plan to the Joint Budget Committee this morning. Benji Hardy will have a fuller report later, but offers this summary so far:
All agencies except Education, Higher Education, Human Services and corrections (both prisons and community corrections), will get 1 percent budget reduction, for a savings of about $7.2 million. This supposedly won’t require layoffs.
Clarification from Benji: After looking at the budget, this apparently is not an across-the-board cut to all agencies. Some get slight decreases, others slight increases and some get a significant cut. I’m assuming this means the decreases to the budgets of other agencies add up to a 1 percent cut when everything is added up. See below for a PDF of the full budget recommendations.
Among the new spending: Hutchinson proposes a $2-a-day increase in the state’s reimbursement rate to counties for holding state prisons; a $13 million payment for corrections employee holiday pay and cost of living raises; at least $10 million for school facilities and recommendations in line with requests for education spending to meet adequacy standards.
Hutchinson’s budget is based on approval of his tax bill as originally passed in the Senate, with a $20 million increase from repeal of a capital gains tax cut.
Sen. Linda Chesterfield brought out that 100,000 taxpayers — of 1.2 million report capital gains — but half the benefits accrue to the top 1 percent of taxpayers, or about 10,000 people who make more than $250,000 a year.
The budget calls for a 4.5 percent increase for corrections. He’s asking for $1 million for drug courts and $300,000 for programs to aid re-entry of prisoners into the free world.
The governor has no money for pre-K, an initiative in which Arkansas once led but which has been frozen at existing support for years. The budget director said, however, that Hutchinson was interested in work with the legislature to find more support, perhaps from surplus money.
The governor’s office provided a press release with a few further details:
LITTLE ROCK – Governor Asa Hutchinson’s balanced budget for 2015-2017 biennium returns $100 million to middle-class Arkansans while providing funding for new priorities, existing programs, and essential state services.
In addition, the balanced budget keeps campaign promises made by the governor on education, public safety, taxes and economic development while finding new savings and efficiencies in state government.
Governor Hutchinson’s balanced budget:
• Meets the adequacy requirements for funding K-12 public schools. (The governor will work with legislators to assess additional needs for state pre-K programs. This is in addition to a four-year, $60-million federal grant the state has earmarked for pre-K.)
• Provides incentive for schools to offer computer-science courses by creating a $5 million Computer Science Initiative Grants program with general improvement funding.
• Increases funding by $1 million for Drug Treatment Courts, including Veterans’ treatment drug courts, and $300,000 for successful prisoner re-entry programs.
• Directs an additional $11.4 million to county jails to reimburse them for housing state prisoners. (The budget also raises the reimbursement rate from $28 to $30.)
• Fulfills the commitment to maintain Higher Education spending.
• Provides a cost-of-living adjustment for state employees.
• Cuts middle-class income taxes, returning some $100 million to 500,000 Arkansans.
• Maintains a balanced budget.
Governor Hutchinson’s balanced budget:
• Reduces the budgets of most state agencies by 1 percent in FY 2016.
• Secures an additional $5 million in ongoing general revenue by redirecting one-half of the special revenue assessment (9 mils) on natural gas production.
• Redirects $2 million from the Tobacco Settlement Funds to Medicaid.
• Transitions the Office of Health Information Technology to a self-funded model by FY 2017 as provided for in the law, resulting in eventual savings of $2.2 million.