State Ends 2015 Regular Session with Balanced Budget

BY STATE SENATOR LARRY TEAGUE –

LITTLE ROCK – Lawmakers ended the 2015 regular session after passing a balanced budget that requires many state agencies to reduce spending next fiscal year.

The state general revenue budget next year will be about $5.2 billion, which is about $133 million more than this year. The increase is due to growth in the economy and not to higher tax rates. Public schools, prisons and health services will receive the bulk of the growth.

Other agencies will operate next year on the same budget as this year, or reduce spending by 1 percent. Colleges and universities will receive the same as this year.

The Public School Fund will increase by $49.5 million, to $2.16 billion.  The state Constitution mandates that the state adequately fund public education for all students, regardless of the cost.

The Department of Human Services, which administers Medicaid, will get an increase in state funding of $80.2 million, bringing the total of state dollars to $1.33 billion next year. The department will receive about three times that amount in federal funding because Medicaid and other programs are matched by Washington at a rate of about 3-to-1.

The Correction Department, which operates state prisons, will have a budget in Fiscal 2016 of $336.6 million after getting a funding increase of $14.3 million. The Community Correction Department hires parole officers and operates work release programs and houses some inmates in minimum security lockups. Its budget will be $78.6 million, after getting an increase of $1.7 million.

Legislators voted to send $5 million to the state Education Department for computer science courses and $3 million to the Arkansas Better Chance pre-kindergarten program.

Many agencies will have their budgets reduced. For example, the Department of Health is slated to have $6.4 million cut from its budget, lowering it to $78.8 million. The Department of Economic Development’s budget will be cut by $1.4 million to $10.6 million.

The legislature approved a cut in income taxes paid on capital gains that will save taxpayers about $6 million next year and almost $12 million the following year. It is HB 1402. For net capital gains made after February 1, 2015, 45 percent will be exempt. After July 1, 2016, the exemption goes up to 50 percent of net capital gains.

The legislature passed Senate Bill 967 to implement ethics reforms in Issue 3, the constitutional amendment approved in November by Arkansas voters in a statewide election. It was referred to the ballot by the legislature during the 2013 regular session.

The legislature recommended referring three proposed constitutional amendments to voters in next year’s general election.

SJR 3 would allow the governor to retain his or her powers when out of state. SJR 16 would expand the authority of state and local governments to issue revenue bonds for economic development projects. HJR 1027 would extend the terms of county officials, such as county judge and sheriff, from two to four years.

At the last hour the legislature approved HB 1751 to allow executions of inmates on death row to be carried out with a combination of drugs. The lethal injection drugs called for under current law are no longer available.

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