State lawmakers debate COVID-19 Rainy Day Fund legislation on first day of special session

by Roby Brock ([email protected]) 637 views 

Arkansas lawmakers made fairly quick work under extraordinary circumstances on the first day of a special session to prepare the state financially for the COVID-19 pandemic.

“When we say extraordinary session, I think this may be the most extraordinary session any of us have ever participated in,” said Senator Jim Hendren, R-Gravette, the President Pro Tempore of the Arkansas State Senate.

Acting at the behest of Gov. Asa Hutchinson, who is projecting a $353 million budget shortfall for the fiscal year ending June 30, 2020, legislators debated two identical bills that set up a framework for transferring and approving surplus and discretionary funds to keep state government operational.

The 35-member Arkansas Senate met in the state Capitol, but exercised caution in spreading out across the Senate chamber and into the public galleries in order to maintain safe distances from one another during the coronavirus outbreak that has hobbled state commerce. The 100-member Arkansas House met at the Jack Stephens Center at the University of Arkansas at Little Rock and maintained “social distancing” in the basketball arena.

State senators take seats in the gallery overlooking the Senate chamber.

The expected budget shortfall is expected in part due to an extension of individual income tax filing deadlines into July and because of the slowdown in commerce from the coronavirus pandemic that has shuttered businesses and sent workers primarily to their homes to work.

State leaders have surplus and discretionary funds from the following sources at their disposal.

  • General Revenue Allotment Reserve Fund – $173.61 million
  • Restricted Reserve Fund- $42.27 million
  • Long Term Reserve – $152.58 million
  • Quick Action Closing Fund – $90.99 million

The bills being considered – House Bill 1001 and Senate Bill 2 – create a COVID-19 Rainy Day Fund, which will allow the transfer of funds into the account to deal with the budget crisis. A six-member panel of legislators must be consulted to approve the disbursement of funds by the state. They include:

  • Speaker of the House Matthew Shepherd, R-El Dorado
  • Senate President Jim Hendren, R-Gravette
  • House Majority Leader Rep. Marcus Richmond, R-Harvey
  • House Minority Leader Rep. Fred Love, D-Little Rock
  • Senate Majority Leader Sen. Bart Hester, R-Cave Springs
  • Senate Minority Leader Sen. Keith Ingram, D-West Memphis

All members of the legislature must be notified in advance of the disbursement of funds before the six-member panel can act.

House members hear from Gov. Hutchinson at UA Little Rock’s Jack Stephens Center.

Due to the state’s Revenue Stabilization Act, which requires an annual balanced budget, Category B and C level funding is being eliminated and a portion of Category A funding for state agencies will also be cut. The level of the cutbacks is not known at this time and the COVID-19 Rainy Day Fund will be used to plug gaps and ensure that critical services can be funded.

State Sen. Jimmy Hickey, R-Texarkana, offered an amendment to the bill proposed that would change the oversight committee for releasing the funds to the existing Peer Subcommittee of the Joint Budget Committee, a 38-member legislative panel. His amendment would add the Senate President and House Speaker as voting members to this oversight committee.

Hickey’s amendment failed by a 13-17 vote. Senators will take up the unamended SB 2 on Friday.

The House of Representatives took up HB 1001, which mirrors SB 2, the rainy day fund. Speaker of the House Matthew Shepherd, R-El Dorado, told members, “We need to pass this. It will allow the Governor’s office, with legislative oversight, to address the needs we have … and those needs are changing hour by hour and minute by minute.”

It passed the House on an unanimous voice vote.

Lawmakers will convene Friday to pass remaining legislation and will wait until 12:01 a.m. Saturday morning to adjourn the mandatory three-day special session.