Arkansas’ balanced budget includes no raises for state employees, chief fiscal officer says

No raises for state workers in Ark. budget plan

LITTLE ROCK, Ark. — State workers won’t get a raise next year under the budget proposal Gov. Mike Beebe sent to legislators Tuesday.

Department of Finance and Administration Director Richard Weiss presented the governor’s 2011 budget a day after the administration lopped $106 million from the current year’s budget because tax revenues have not met projections.

Weiss told Joint Budget Committee members that personal and corporate income tax revenues have fallen short, as has income from state sales taxes. However, Weiss said it appears the recovery has begun and revenues will improve over the coming 18 months.

A 2.3 percent cost-of-living raises for state workers would have cost about $20 million. The governor has $32 million in a rainy day fund.

“He (Beebe) is trying to be very conservative and to have a little bit of flexibility out there,” Weiss said.

The $32 million is what’s left after Beebe announced Monday he would use $8 million from the rainy day fund to help state human services and prisons through the latest budget cut. No layoff will result from Monday’s budget cut, nor were there layoffs last fall when the state cut its budget by $100 million.

Beebe’s budget proposal also includes a balanced budget reserve fund of $34.5 million. Any revenue that comes in above projections would flow into that fund.

Sen. Jim Luker, D-Wynne, among other legislators, complained that tax revenues that come in above projections should go into general revenue. But Weiss said the governor wants to have the reserve fund as a safety net.

Rep. Bruce Maloch, D-Magnolia, co-chairman of the Joint Budget Committee, said the budget hearing process may be wrapped up in two weeks, rather than the three weeks set aside before the session begins Feb. 8.

“I think everyone understands the budget situation we are in,” Maloch said.

The committee advanced funding proposals for the state’s colleges and universities, but those numbers were developed before the two budget cuts and will have to be adjusted later in the budget process. Beebe’s 2011 budget calls for spending $714.5 million in general revenue on higher education, an increase of $17.2 million from fiscal 2010.

Capital spending will have to be taken up in meetings in the fall before the 2011 General Assembly starts.

Higher Education Department director Jim Purcell said scholarship money from the new Arkansas Lottery won’t help universities because they would already be getting the same amount in tuition. Schools have asked for money to add admissions staff due to the sharp increase in inquiries since the lottery began in the fall.

Also, enrollment is up about 10 percent at state colleges and universities due to the slow economy, although in most cases the campuses have been able to absorb those students, Purcell said.

Rep. Steve Cole, D-Lockesburg, is a vice chancellor at Cossatot Community College, which has campuses in three southwest Arkansas counties. The school has the lowest credit-hour fee of any school in the state at $49 yet was just ordered to cut $80,000 in spending, he said. Most entering students need remedial classes, but faculty, including administrators, are already teaching full loads.

“What we’ve done for K-12, we’ve got to do for higher education,” Cole said, referring to the years-long effort to improve the state’s public schools.

Budgets for public schools and the Department of Correction will be discussed Wednesday. On Thursday, the Health Department and the Department of Human Services are on the agenda.