Arkansas's Republican Gov. Asa Hutchinson will likely see most of his approximately $5.6 billion proposed budget for fiscal 2018-19 adopted without changes. It goes to the House of Representatives this week, where three in four voting members are Republican, and the Senate, with its strong Republican majority.
"I created a balanced budget that actually has a $64 million surplus that funds education, the priority needs of our state," Hutchinson said. "I'm hoping the legislature will greet that well, and will pass that, and as I give the State of the State address" today, "that'll be something I emphasize."
Hutchinson's budget generates a surplus of nearly $64 million for 2018-19; $47.9 million is earmarked for a reserve fund that can only be tapped with legislative approval. The other $15.9 million is for highways — specifically, a match of available federal highway funds.
Hutchinson has proposed — and gotten passed — two substantial tax cuts in the last three years that cut out roughly $150 million of total state revenue annually. Reportedly, he will eventually seek a reduction in the top individual income-tax rate from 6.9 percent to 5 percent, a move that the finance department estimates could mean the loss of twice that — $300 million — annually.
That fact calls to mind similar tax cuts and subsequent budget shortfalls in Kansas and Oklahoma, states with Republican governors and similarly dominant Republican majorities in their legislatures. In Oklahoma, one in five schools now holds classes four days a week because of budget shortfalls; highway patrol officers were given mileage limits to keep fuel expenditures low.
"Oklahoma, [where] you’ve got kids going to school four days a week, that is horrible," veteran Democratic lawmaker Greg Leding (D-Fayetteville) said. "Think about the long-term damage."
Leding said the governor's budget makes the bare minimum legal allocations for education funding. The governor on Thursday said he doesn't expect much blowback on education funding "because we've met our adequacy requirements."
Adequacy is a term codified in state law and denotes fairness in education spending across districts.
"Anytime we say that education is adequately funded," Leding said, "I want to punch something."
But, when asked what he could do to protest if not make changes, Leding demurred.
"The one problem, being a Democrat in the House, is that there are 24 of us, so we don’t have any kind of leverage, because the Republicans, having more than three-fourths of that chamber, can pass any appropriation without a single Democratic vote."
In fact, the real floor debates might take place between Republicans.
"I don’t know that there’s a big fight looming," said Rep. Les Eaves (R-Searcy), vice-chair of the Joint Budget Committee, about the prospect of a big budget dispute this fiscal session.
"I would say there’s going to be some pretty deep discussions about Arkansas Works and us continuing on with that program," but he still predicted his chamber, the House, would pass it easily.
"Again, the governor's worked with his agencies. The agency heads know best. And at this point, they seem to be comfortable with what the governor's providing for," said Sen. Jonathan Dismang (R-Searcy), who's president pro tempore of that chamber.
The governor has sought — and some say gotten and is about to announce — federal permission to implement work requirements for Medicaid recipients (part of the state's Arkansas Works health care program), as well as stricter eligibility standards. That will make Arkansas’s version of Obamacare more acceptable to many hardline conservatives, Dismang said.
Medicaid is a billion-dollar line-item in the state budget, and one that many Republicans repudiate. But the governor has maneuvered to keep it in some form because it means perhaps a hundred million dollars from the federal government coming into the state for health care each year.
The fiscal session is scheduled to last 30 days, and it may be extended.
Leding is seeking a senate seat this election year, while the governor himself is up for re-election. That, Hutchinson said, “allows a little bit of games to be played from time to time, we’ll watch that, and let’s save some battles for down the road.”
This story is produced by Arkansas Public Media. What's that? APM is a nonprofit journalism project for all of Arkansas and a collaboration among public media in the state. We're funded in part through a grant from the Corporation for Public Broadcasting, with the support of partner stations KUAR, KUAF, KASU and KTXK. And, we hope, from you! You can learn more and support Arkansas Public Media's reporting at arkansaspublicmedia.org. Arkansas Public Media is Natural State news with context.