Money's short; Beebe taps reserves | Arkansas Blog

Tuesday, May 4, 2010

Money's short; Beebe taps reserves

Posted By on Tue, May 4, 2010 at 1:14 PM

The state report on April tax revenue isn't good. Announcing an "unexpected shortfall," Gov. Mike Beebe today announced transfers from reserves  to shore up education, medical and other services. The overall forecast for income this budget year, which ends June 30, has been reduced by $41 million. It had been cut back previously.

Here is the April revenue report. Gross collections for the month were $49 million below the same month last year and $41 million below the forecast. Individual income tax collections were down, but income tax withholding from paychecks was up. This could signal fallout from the dreadful 2009 as returns come in and indicate a pickup in 2010. Maybe. Sales tax collections were also up over last year, a measure of consumer spending. Finally, tobacco tax revenue is way up.

There's about $14.6 million left in the rainy day fund, the governor's office says,  should the unexpected become routine in months ahead. At some point, budget cuts might become a necessity if that happens, though Beebe contends the economic trend remains positive. Also, a Beebe spokesman notes that all the rainy day money allocated today may not would up being spent by the agencies earmarked for transfers. What the governor has said so far:

Governor Mike Beebe has authorized the release of rainy-day funds and other fund transfers to protect state services after an unanticipated shortfall in April revenue.  The anomaly in non-wage revenues, also appearing in other states around the country, has led the Arkansas Department of Finance and Administration to recommend a reduction in the FY2010 budget forecast of $41 million.

"Our overall economic trend remains positive, and if this anomaly had hit a few months ago, we might have been able to make up for it over time," Governor Beebe said.  "However, with only two months left in the current fiscal year, we are going to move other money, including rainy-day funds, to prevent any potential cuts in state services.  We set aside rainy-day money for this exact type of scenario."

To compensate for the $41 million reduction, $17.3 million will move to the public school fund unspent general revenue from the Education Facilities Partnership Fund.  A reallocation of $6.3 million in federal reimbursements will prevent any reduction in Medicaid services.  There will then be $17.4 million in rainy-day funds made available to other state agencies and to institutions of higher education to prevent any loss of services.

From the ArkTimes store


Comments (3)

Showing 1-3 of 3

Add a comment

Subscribe to this thread:
Showing 1-3 of 3

Add a comment

More by Max Brantley

  • The Clintons

    I wasn't particularly excited about the 25th anniversary celebration of Bill Clinton's election. Life goes on.
    • Nov 23, 2017
  • Memphian named as new Little Rock fire chief

    City Manager Bruce Moore has chosen Delphone Hubbard, a 22-year veteran of the Memphis Fire Department, to be Little Rock fire chief, succeeding Gregory Summers, who retired in August.
    • Nov 22, 2017
  • Little Rock dentist sues over his arrest

    KARK/Fox 16 reports that Dr. Jose Turcios, a Little Rock dentist acquitted of a charge that he'd molested a teen patient, has sued police officers who participated in his investigation and arrest.
    • Nov 22, 2017
  • More »

Readers also liked…

  • Judge anticipates punishment of lawyers in Fort Smith class action case

    Federal Judge P.K. Holmes of Fort Smith issued a 32-page ruling yesterday indicating he contemplates punishment of 16 lawyers who moved a class action lawsuit against an insurance company out of his court to a state court in Polk County after a settlement had been worked out.
    • Apr 15, 2016
  • Speaking of the Clinton Foundation: Returns in maize and beans

    A reporter for Politifact, the Pulitzer Prize-winning fact-checking organization, sent a reporter to Africa to see where money given to the Clinton Foundation has been put to work. He found tangible results.
    • Sep 6, 2016
  • LR speakers blast state board for double standard

    A series of speakers, beginning with Sen. Joyce Elliott, denounced what they saw as a hidden agenda favoring charter schools at the state Department of Education and asked the state Board of Education for return of local control.
    • May 12, 2016

Most Shared

Most Viewed

Most Recent Comments



© 2017 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation