Editor’s Note: Sen. Gilbert Baker (R-Conway) is co-chair of the powerful Joint Budget Committee. In the 2012 fiscal session, he and his counterpart, Rep. Kathy Webb (D-Little Rock), will both do a lot of heavy lifting to keep state government properly funded and operational. What are his priorities? We asked Sen. Baker to share his thoughts in this op-ed which appears in the latest issue of Talk Business Quarterly (available today).
In 2008 Arkansas voters passed a constitutional amendment to limit the spending authority in state government appropriation bills to only one year, which means the legislature must meet in a regular fiscal session in even-numbered years. In February, the legislature will convene for the second fiscal session in Arkansas history.
Some people get nervous when the legislature is in session, but the good news is that having a fiscal session allows us to approve budgets based on more up-to-date revenue forecasts. In our changing and challenging economic climate, it is essential to base budgets on current data. It’s even more important for states like Arkansas that operate under a balanced budget every year.
As we head into the February session, the Governor takes the lead. The executive branch will present an official revenue forecast, which will be the basis for dollar amounts in appropriation bills.
The Governor will produce his blueprint for a balanced budget for the Fiscal Year 2013, which begins July 1, 2012 and ends June 30, 2013. The legislature will then debate and approve appropriations, working with the Governor on the funding mechanism know as the Revenue Stabilization Act (RSA).
Appropriation bills authorize spending when funding is available. Revenue Stabilization, our balanced budget law, is not an appropriation bill. It puts tax revenue into agencies’ accounts, making funds available.
Economic forecasts indicate budgets will be tight. We continue to live in uncertain economic times. The good news is that because of Arkansas’ conservative budgeting we are not in debt and we actually expect some increase in revenue in the forecast.
One positive factor has been the powerful economic engine of the Fayetteville Shale gas play. It has infused billions of investment dollars into our economy, creating jobs and tax revenue.
Indications are that the Governor will recommend a small increase in spending for K-12, to meet our constitutional mandate to adequately fund public education, and he will address the growing needs of the Medicaid program. Almost every other state budget will be flat through Fiscal Year 2013.
I do not foresee fireworks. There is so little room for growth, and in this economy many people don’t have jobs or have had to cut back. State government should hold the line on spending.
I do believe we should discuss higher education, however. To expand economic prosperity we have to increase the number of adults with college degrees. That means looking for efficiencies and asking institutions of higher education to be accountable for results. We must also realize that to do more often takes more resources.
The fiscal session will almost surely produce no increase in general operating funds for colleges and universities. We will look for ways to maintain several specialty scholarships that are scheduled to be cut. Those scholarships help students who have excelled (Governor’s Distinguished), or whose families have special needs (Military Dependents), who have the opportunity to do undergraduate research (SURF) or who participate in a unique internship (Washington Center).
Many of these awards are scheduled to be cut, but with a relatively small amount of money they could be restored to adequate levels. Investing in students should be a priority.
This session should be kept tight, conservative and be done quickly. I believe we can produce a budget that continues to keep Arkansas moving forward and out of debt. The current administration in D.C. could probably take a page from our book!
Sen. Gilbert Baker, R-Conway, represents District 30.