Arkansas House, Senate back $4.5B spending plan, lottery scholarship amounts

Ark. Legislature OKs budget, lotto scholarships

LITTLE ROCK, Ark. — Arkansas lawmakers on Wednesday approved a $4.5 billion spending plan for the coming year and set amounts for scholarships to be funded by the state’s lottery, inching closer toward the end of the state’s first fiscal session.

Gov. Mike Beebe, however, hinted at a new fight with lawmakers over local project money and left open the possibility he would reject plans to tap into the state’s unclaimed property fund and the fund that finances constitutional offices for $2.9 million in budget needs.

The House and Senate approved identical versions of Beebe’s spending plan and legislation funding $5,000 scholarships for four-year schools and $2,500 scholarships for two-year schools. The measures head to each chamber for final votes on Thursday.

The votes put the Legislature on track to wrap up its business by Thursday. Lawmakers have been at the Capitol since Feb. 8 for a fiscal session, the first under a constitutional amendment requiring the Legislature to meet and budget annually.

“We wanted to have a short and sweet session and by and large it’s been that,” House Speaker Robbie Wills said. “We don’t want to be here a day longer than we have to.”

Beebe’s proposed Revenue Stabilization Act increases the state’s general revenue spending by $176 million for the year starting July 1. It would restore most of the $206 million in budget cuts Beebe ordered over the past year due to declining tax revenues.

It passed the Senate unanimously, and House members approved it on a 94-5 vote. Republican Reps. Ed Garner of Maumelle, Frank Glidewell of Fort Smith, Dan Greenberg of Little Rock, Bryan King of Green Forest and Mark Martin of Prairie Grove voted against the proposal.

King, who is also the House minority leader, said he believed that state spending was growing too much even as revenues drop.

“Something’s got to give, and we’ve got to start limiting government spending and getting back to building surpluses where we can give money back to people,” King said.

Lawmakers this week had refused to let Beebe borrow $2.9 million of their money for local projects for some budget needs, instead tapping the unclaimed property fund and the fund that finances constitutional offices.

Legislators, however, have backed Beebe’s proposal to borrow $6.3 million from their portion of the General Improvement Fund, mostly for reimbursing counties for housing state inmates. The loan would be repaid with any fund balances state agencies have at the end of the year.

Beebe has called tapping the other funds risky, and his chief fiscal officer has projected the unclaimed property fund will end this budget year with a $1.9 million surplus.

A day after saying Beebe would sign the measures if they reached his desk, his spokesman said Wednesday the governor was now looking at possibly vetoing them.

“At this point, nothing is off the table,” Beebe spokesman Matt DeCample said.

The proposals to tap into the funds are included in several appropriations bills that await final votes in the Legislature.

DeCample has said Beebe believed the Legislature was backtracking from its agreement last year to hold back $15 million of its $60 million General Improvement Fund in case of an economic downturn.

The lottery-funded scholarships approved Wednesday were the only non-budget item lawmakers planned to consider during the fiscal session. Arkansas voters approved a constitutional amendment authorizing the state to sell tickets to raise money for college scholarships, and the state began selling tickets in late September.

The lottery is expected to raise $112 million for scholarships in its first year. Legislative leaders have said they expect more than 20,000 incoming freshmen, current college students and nontraditional students to receive the lottery-funded scholarships.

Lt. Gov. Bill Halter, who spearheaded the campaign for the lottery amendment, called the vote the “latest in a series of victories for Arkansas students and families.”

To receive scholarships, students must complete the state’s Smart Core curriculum and either obtain a 2.5 grade-point average or score a 19 on the ACT.

The scholarship amounts passed the Senate unanimously, and an identical measure passed the House on a 98-2 vote. Republicans Debra Hobbs of Rogers and John Burris of Harris, who had both signed on as co-sponsors of the legislation, voted against the measure in the House.

Burris objected to a provision in the bill that would delay stricter eligibility guidelines for students who graduate from grade inflating schools.

At those schools, 20 percent or more of students earned an A or B in math courses but scored below proficiency levels on corresponding state exams.

To be eligible for the lottery scholarships, under current law, students from those schools must earn a 2.5 GPA and score a 19 on the ACT or score at a proficient level or better on the state’s end-of-course exams. The legislation delays that requirement for a year.

“It takes us a step back,” Burris said. “We’re not doing anybody any favors by passing these kids on to higher ed or by not holding their school districts accountable to give them the education they’re supposed to give.”