Arkansas House and Senate recess first-ever fiscal session; will meet March 4 for adjournment

Arkansas House, Senate recess fiscal session

LITTLE ROCK, Ark. — Arkansas lawmakers recessed the state’s first-ever fiscal session Thursday, giving final approval to the state’s $4.5 billion spending plan and legislation setting the amounts for lottery-funded scholarships to be awarded this fall.

The House and Senate wrapped up less than three week’s worth of work under a constitutional amendment voters approved requiring the Legislature to meet and budget annually.

The Legislature faced the possibility of a battle with Gov. Mike Beebe over local project funding, with the governor considering a veto of legislation that would tap the constitutional officers’ funds for some budget needs. Lawmakers had rejected Beebe’s proposal to borrow money from funds intended for local projects for the budget needs.

“That’s a fund that’s potentially going to go into the negative,” Beebe said. “Part of my responsibility is to look at all of this.”

The House and Senate approved identical versions of Beebe’s proposed Revenue Stabilization Act, which sets the state’s spending priorities based on expected revenues. Beebe’s proposal increases general revenue spending by $176 million, restoring most of the $206 million in cuts that have been made in the past year.

The chambers planned to reconvene March 4 for formal adjournment and to consider overriding any vetoes Beebe may issue.

The 35-member Senate unanimously approved the spending proposal, while the House approved it on a 96-3 vote. Both measures head to the governor’s desk for his signature.

Lawmakers also sent Beebe legislation that would fund $5,000 scholarships to four-year schools and $2,500 scholarships to two-year schools with net revenues from the lottery. Arkansas voters approved a lottery in 2008 and the state began selling tickets in late September.

The state is expected to award scholarships to more than 20,000 incoming freshmen, current college students and nontraditional students. The lottery is expected to raise $112 million for the scholarships.

The 35-member Senate unanimously approved the scholarship amounts, and an identical bill passed the House on a 98-0 vote.

The session was the first under the amendment voters approved in 2008 requiring annual budgeting and meetings. Previously, Arkansas budgeted on a biennial basis and its Legislature would meet in regular session in odd-numbered years.

House Speaker Robbie Wills said he believed the state benefited from the annual sessions, and thought the short time frame offered an example for the future.

“I would recommend future fiscal sessions be as focused as this one,” Wills said.

Senate President Bob Johnson said he wasn’t convinced of the value of meeting annually.

“I don’t know that there was anything done this fiscal session that couldn’t have been done in 10 days in a regular session,” Johnson said. “I just don’t see it.”

Rep. Bruce Maloch, co-chairman of the Joint Budget Committee, told the House to keep its focus on holding the line on the budget.

“Always make certain that we’ve got something to fall back on in hard times,” Maloch said.

It was unclear what would happen if Beebe rejected the plan to tap into the state Central Services Fund — which funds constitutional offices, the Supreme Court and several other agencies — to pay for $1.6 million in redistricting costs. The state’s chief fiscal officer has said the fund is expected to end the budget year with a $1.9 million deficit.

Beebe said he wouldn’t object to the Legislature’s plans to tap into the state’s unclaimed property fund to pay for $1.3 million in budget needs, citing the state auditor’s report that the fund has $52 million in it.

The governor had asked lawmakers to loan $9.2 million from their portion of the General Improvement Fund to pay for the needs, but legislators only approved handing over $6.3 million. Most of that will go toward counties for housing state inmates.

The Legislature last year agreed to hold back $15 million of its $60 million GIF money — which goes toward local projects around the state — in case of an economic downturn.

Johnson and Wills both said they would oppose any efforts to override a Beebe veto. Joint Budget Committee Chairman Gilbert Baker said much of the redistricting costs would not be until next year.

The fight put Johnson, once a staunch supporter of the Legislature’s local project funds, in the position of backing Beebe’s proposal to borrow the money.

“I don’t understand what people are putting at risk. What are you putting at risk?” Johnson said.

One lawmaker took a not-so-subtle jab at Beebe over the project money, reading a poem modeled after “The Night Before Christmas” about the Legislature’s local project money. In the poem, Sen. Terry Smith recalled how Beebe as a state senator supported in 1997 taking away the governor’s authority to dole out the General Improvement Fund money.

“That is until now, the historic fiscal session. When Beebe the king tried to corner the action,” Smith’s poem read. “He says he’ll give presents to good girls and boys. But in order to do so, he needs all the toys.”

Later, Beebe visited the Senate floor and asked Smith for a signed copy of the poem.

“I thought it was clever,” Beebe said.