Arkansas Governor’s Proposed Budget Preview

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LITTLE ROCK — The Legislature has begun budget hearings in preparation for the 2022 tax session, which begins Feb. 14.

Lawmakers will consider the governor’s proposed balanced budget of about $6 billion for fiscal year 2023, which officially begins July 1.

The governor’s proposal would increase general state revenue spending by 3.3% over this year’s budget. This year’s budget is approximately $5.85 billion and the Governor is proposing to increase it to $6.04 billion.

The Governor’s proposed budget is a starting point, and the Legislature will finalize all financial decisions, because under the Arkansas Constitution, the Legislature has the power to authorize state government spending.

No matter how the legislature alters the governor’s spending plans, the final version of next year’s budget will be balanced. Arkansas does not spend in deficit. If tax revenue declines due to an unexpected economic downturn, government spending will be reduced proportionately.

The Governor is proposing to increase the Public Schools Fund by $69.6 million, 3.08 percent. This would bring the fund to $2.33 billion.

The governor is proposing a $66.3 million increase to the Department of Human Services budget. This represents a 3.72% increase and would bring the state’s share of the DHS budget to $1.85 billion. The federal government provides matching funds for services provided by DHS. Medicaid is the main one.

The Division of Child and Family Services of DHS administers foster care, child protection, and adoption services. The governor’s proposal would increase funding for child protective services.

The budget proposal would reduce the waiting list of families who need home care or community care for loved ones with developmental disabilities. Now there are just over 3,000 people on the waiting list. The governor and legislative leaders are trying to eliminate the need for a waiting list by 2025.

Four-year universities would receive an additional $12.2 million in state aid under the budget proposal. This is a 2% increase from the $612 million universities are receiving this year.

Two-year colleges now receive about $118 million in state aid. The proposed budget would increase this amount to $119 million. The increase would be 0.69%.

The state police would get a 10.6% increase, from $70.6 million to $78 million. The governor said increasing salaries for State Troopers would encourage local law enforcement to make their salaries more competitive.

The Corrections Division, which manages the state’s correctional units, would get a raise of $3.9 million, or 1%, bringing its annual spending level to $379 million.

The Community Corrections Division has residential treatment centers and is responsible for probation and parole. Its annual budget would increase by 0.78%, or $753,000, to $97.7 million for fiscal year 2023.

About 55% of the general state revenue fund goes to education. This includes higher education institutions, which get 1%, and K-12, which gets 40%. The State Education Division gets 2%. About 32% of general government revenue is spent on health and social services, and about 8% on prisons and correctional facilities. Various smaller agencies receive the rest.

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