UPDATE: Governor announces $70 million budget cut to meet tax revenue shortfall | Arkansas Blog

Friday, April 28, 2017

UPDATE: Governor announces $70 million budget cut to meet tax revenue shortfall

Posted By on Fri, Apr 28, 2017 at 11:24 AM

click to enlarge ANNOUNCES BUDGET CUT: Gov. Hutchinson. - BRIAN CHILSON
  • Brian Chilson
  • ANNOUNCES BUDGET CUT: Gov. Hutchinson.

Gov. Asa Hutchinson
said this morning that the state budget for the fiscal year, which ends June 30, will be cut $70 million because of a shortfall in revenue this year.

That cut — on a budget of $5.2 billion — won't mean a reduction in services or jobs, he said, because of cuts in expenditures during the year throughout state government. He cited, particularly, the Department of Human Services. Policy changes there had produced spending reductions that meant coming budget cuts wouldn't cause a reduction in payments to service providers or a loss of jobs.

He said the cuts would be in Category B spending of the Revenue Stabilization Act.

He said his preliminary review of April revenue indicted income met the forecast. He revealed no specifics. Still to be learned is the impact of Amazon's decision to begin voluntary collection of sales taxes on Arkansas purchases, technically not required by law.

Hutchinson emphasized the positive. "The Arkansas economy is on track and has momentum."

He reiterated in a Q&A period that executions conducted this month were done in "accordance with protocols" and he saw nothing that happened that called for anything but a routine review. He said he saw no need to ask for legislative consideration of an alternative form of capital punishment. David Koon will report more later on his extensive questioning on execution protocols, but the governor indicated no concerns and confidence in the Correction Department. He said the executions demonstrated the system of law worked, after long delay, and brought justice to victims' families. He said he believed there was "no indication of pain" by the inmate so no investigation was justified.

The governor announced a short list of items on a special legislative session that he expects to release this afternoon.

* Bills would allow changes in the expanded Medicaid program to impose new work requirements if the federal government approved as expected and also to dramatically reduce the income above which people no longer qualify for the Arkansas Works coverage. By moving from an income of 138 percent to 100 percent of the poverty level — down to about $12,000 a year for an individual — some 62,000 will be dropped from coverage. The governor thinks most of these people will be able to get subsidized coverage in the health marketplace. Legislation also will make structural changes in the health insurance marketplace.

* He anticipates a transfer of money to a reserve fund that would increase the state's bond rating and thus lower the cost of bonded debt.

* He also mentioned "technical codifictions" for ethics law and the law on medical marijuana, but didn't mention specifics.

UPDATE: Here's the specific call for the special session.

Additional flesh provided there indicates he's going to tap tobacco settlement money to transfer into a reserve fund, money that once was almost sacrosanct for health purposes and no other.

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