Arkansas General Assembly: Week 1 session recap

Arkansas lawmakers convened Monday (Feb. 12) for the 2012 fiscal session during which legislators began crafting a balanced budget proposal for state services, prioritizing the spending of a $72 million surplus, and possibly considering several non-fiscal matters.

Gov. Mike Beebe (D) called for quick work and strict attention to budgetary matters. The legislature has 30 days to take care of its budgeting process for the 2013 fiscal year, which kicks in on July 1, 2012.

“It is my job to propose and your job to dispose,” Beebe said in acknowledging that the legislature has the power over the state’s purse-strings. “I want you to be out of here as soon as you want to be out of here, obviously after doing the people’s business."

Beebe has formally laid out his $4.72 billion balanced budget proposal, which calls for expanding public education funding by $56 million and increasing Medicaid spending by $114 million. In most other categories, Beebe has called for flatline spending.

By Wednesday it was met with a counter-offer from Republicans in the legislature, who proposed a budget that was $21 million smaller.

The GOP budget proposed cuts at 11 state agencies such as the AEDC, the Education Department, Agriculture, and Department of Environmental Quality. The GOP budget restored some prison cuts and stripped about $14 million out of the Medicaid operating budget to be replaced by one-time budget surplus funds.

House Minority Leader Rep. John Burris, R-Harrison, said the GOP budget proposal asks state agencies to find savings on their own.

"That's really not the legislature's job. We're not the managers. Somebody gets paid good money to sit over there and manage that agency with the funding levels we provide. Our job is to fund. We're simply proposing that we do it with a little bit less and ask them to do more with a little bit less. And that's reasonable," Burris said.

Joint Budget Co-chair Rep. Kathy Webb, D-Little Rock, said she felt the budget counterproposal was offered in bad faith.

"I'm very disappointed that they chose to make this so partisan," she said.

Webb pointed to the weeks worth of pre-session budget hearings where Republican members could have raised objections to agency budgets. The Governor's proposal is based on those hearings and was adopted previously by the bi-partisan Joint Budget Committee.

In other news, the House of Representatives passed a resolution to allow a non-budget bill to be introduced in the fiscal session.

HCR 1009, by Rep. Larry Cowling, D-Foreman, would give lawmakers permission to file a bill to repeal a law giving the trucking industry a tax break. The resolution must still pass the State Senate in order for the bill to be filed.

In the 2011 regular session, truckers received a sales tax exemption on Class Six and Seven trucks that are engaged in interstate commerce. Arkansas finance officials estimated the exemption would cost the state about $4 million annually in general revenue.

The state’s trucking industry pushed for the measure — which would not go into effect until July 1, 2012 — on the condition they would support a five-cent diesel fuel tax increase for roads. Public polling showed the diesel tax increase would fail and truckers pulled their support. As a result, the industry agreed to the repeal of the yet-to-be-enacted tax cut.

Next week, lawmakers will return to the capitol on Tuesday to resume their business. More discussions on budget matters are expected, as well as the trucker tax repeal measure and other possible non-fiscal bills.

Rep. Davy Carter, R-Cabot, also said he may convene the House Revenue and Tax Committee he chairs to map out a post-session plan for reviewing every sales tax exemption in Arkansas. Carter is seeking to evaluate sales tax breaks as part of a larger plan to lower Arkansas' individual income tax rates.