Week In Review

State Capitol Week in Review

            LITTLE ROCK – The legislature held two sessions in 2014. The first was a fiscal session that began in February to approve a $5 billion state general revenue budget. The second was a three-day special session in June and July to expand the capacity of state prisons and cut costs of the teacher health insurance system.

            Almost all of the 300 bills approved during the fiscal session were appropriations for state government, school districts and institutions of higher education.

One was the state Revenue Stabilization Act, which is the Arkansas balanced budget law that prevents state agencies from spending more than they bring in. It sets spending priorities and requires agencies to cut spending if their revenue declines.

At the end of the fiscal year on June 30, about $126 million in surplus funds was available because of very conservative budgeting by the legislature. Legislators voted to spend about $21.9 million of the surplus on special projects and to keep more than $100 million in reserves.

About $5 million went into a loan fund for charter schools to use for facilities improvements and another $5 million went for installation of fiber optic cables so public schools could increase broadband capacity. 

The Correction Department got $5 million for overtime and holiday pay of staff, and another $3.7 million to reimburse county jails for holding state inmates. Also, $2 million of the surplus went to the Health Department to prevent, detect and treat breast cancer.

            During the summer special session the legislature approved changes affecting the health insurance system for public school employees, who were facing premium increases of as much as 35 percent.  The system covers about 47,000 people. 

            Spouses of school employees will not be eligible to participate in the teacher plan if they are eligible for health coverage elsewhere, such as where they work. Also, part-time employees will no longer be eligible, beginning in 2015. 

            In a recent report to legislators the state officials in charge of teacher health insurance estimated that the system would have about 2,300 fewer members in 2015 because 1,600 spouses and 700 part-time employees were being dropped.

            The Arkansas inmate population is more than 17,000 and growing. State prison units and many county jails are filled to capacity.  The legislature voted to expand prison space by about 600 beds.

Also passed during the special session was a temporary prohibition against the state lottery installing keno and other fast-pace computer games. The moratorium expires March 13, 2015.  A permanent prohibition on keno is likely to be reconsidered during the 2015 regular session.

In other significant state news during the past year, the governor announced that the state’s unemployment insurance trust fund has recovered significantly and by the end of the year will not owe any money to the federal government.

            When the trust fund operates at a deficit for two or more years, the costs to employers is greater, so the governor’s announcement is good news for Arkansas businesses because it means their costs will be lower.

            Also in 2014, the Arkansas Highway and Transportation Department opened bids for the first project in the Connecting Arkansas Program (CAP), which will be paid with revenue from a half cent sales tax collected for 10 years. The tax was approved by voters in a 2012 election.  It will finance an investment of $1.8 billion in 31 separate highway construction projects.