Thursday, January 23, 2014

Week In Review

State Capitol Week in Review
            LITTLE ROCK – In addition to approving budgets for state government operations next year, during the fiscal session the legislature will allocate unspent surplus funds that have built up in the state treasury over the previous year.
            Traditionally, surplus funds are spent on “one time” projects, while recurring expenses such as salaries and maintenance are paid for with tax revenues that are collected every year.
            At the end of the current fiscal year, on June 30, the state will have an expected surplus of $126 million.  The governor has proposed spending about $43.6 million of that.
His proposals for spending the surplus include putting $10 million into a short-term loan program for charter schools that need financing to upgrade facilities.
The Walton Family Foundation has pledged a matching contribution of $10 million that charter schools could use to obtain long term financing. The Arkansas Development Finance Authority, a state agency that issues bonds, would participate in the loan program.
A significant amount of the surplus would go to county jails and state prisons under the governor’s spending plan. 
About $10 million would go to the Department of Correction, which operates state prison units, to pay overtime and extended hours worked by staff. Another $720,000 would be used to immediately open a state prison unit in Malvern.
Another $7.4 million would reimburse county jails for the expenses they incurred holding state inmates when there was a lack of available space in state prisons.
Also, the Department of Community Correction, which operates work release programs and drug courts, would get about $500,000 to reimburse county jails for holding inmates when there was no room for them in state prisons.
About $5 million of the surplus would replenish the governor’s quick action closing fund, an account that is spent to recruit industries to Arkansas. About $10 million would be spent to expand broadband access for public schools.
The legislature has power over all state government spending requests, whether they are “one time” projects paid for with surplus funding or ongoing expenses paid for with revenue from sources such as sales and income taxes. When the fiscal session convenes on February 10 the legislature will consider the governor’s spending plan and likely will make both major and minor changes to it.
The 2014 fiscal session will be the third in the state’s history.  In 2008 Arkansas voters approved a constitutional amendment establishing fiscal sessions in even-numbered years, and the first fiscal session was held in 2010.  That session and the 2012 fiscal session were uneventful, in large part because legislators limited the agenda mostly to budget items.
The constitution allows for the introduction of non-budget bills during a fiscal session, but it requires approval from an extraordinary majority of both the Senate and the House of Representatives.
It will last 30 days, but the legislature may extend it to 45 days if 75 percent of the membership votes to do so.  Under the constitution, a fiscal session cannot be extended beyond 45 days.
Legislators have been meeting at the Capitol to review state agency spending requests, in preparation for the fiscal session.

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