Week In Review

State Capitol Week in Review

LITTLE ROCK – The Office of Procurement oversees the many areas in which state government buys commodities, equipment and services from the private sector.

If you own a business and have an interest in selling goods to state government agencies, you can get valuable advice from the Procurement Office about how to start. The Office has a manual for vendors that is available online at this address: http://www.dfa.arkansas.gov/offices/procurement/Documents/p301Manual.pdf

The main page for the Procurement Office is at this web address: http://www.dfa.arkansas.gov/offices/procurement/Pages/default.aspx

The page has many helpful links that display contracts being bid and commodities the state government wants to buy. It also lists agency staff and contact information.

The Cooperative Extension Service, which is run by the Agriculture Division of the University of Arkansas, operates an office that advises people on how to get government contracts. It's called the Arkansas Procurement Assistance Center (APAC) and its web page is at this address: http://www.arcommunities.org/APAC.htm

If more Arkansas businesses become adept at contracting with state government, they are more likely to prosper and create jobs. The result is economic development.

Arkansas was one of four states to end the fiscal year in relatively sound financial shape. The others are Alaska, Montana and North Dakota. All other states did not have enough revenue to pay for planned expenditures.

State revenue fell for the second consecutive year, but because of conservative budgeting we avoided drastic cuts in services that other states were forced to make. Also, the governor tapped into rainy day funds to avoid cuts.

The 2010 fiscal year ended on the final day of June. Over the course of the year, Arkansas state government had to reduce spending by $246.9 million from the amounts originally budgeted. The Revenue Stabilization Act, which the legislature enacts every year in Arkansas, is our balanced budget law. It prioritizes all state agency spending. When state revenue decreases, state spending decreases accordingly.

Unlike the federal government, state government does not deficit spend. During the fiscal session earlier this year the legislature adopted very conservative budgets for state agencies. As a result of tight budgeting and forecasting, the state ended the 2010 fiscal year with a small reserve fund.

The reserves will allow the state to put $25 million in education funding. The importance of this is that it will help maintain adequate funding of K-12 in case the economy doesn't rebound.

Also, the state was able to restore $10 million that had been cut from state aid to colleges and universities. Legislators had agreed to give up about $6 million in General Improvement Funds, which pay for local projects. That amount was restored at the close of the fiscal year. Finally, about $14 million was put back into rainy day funds.

State budget officials and economists expect slow improvement in the coming year, and hope that the economy in Arkansas may have hit bottom and begun a rebound. However, to be on the safe side the state will continue to budget cautiously and conservatively.