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— State government’s budget for the current fiscal year has been cut 2.2 percent because tax revenue has slowed during the current economic recession.

The cuts amount to almost $100 million. After the cuts, the state’s general revenue fund for this fiscal year will total an estimated $4.4 billion.

Funding for prisons, State Police operations and community health clinics will be affected, as will funding of colleges and universities. However, public education from kindergarten through grade 12 will not be. Public school districts will continue to receive funding as budgeted because the state Education Department will use reserves to maintain current funding levels.

Schools are protected from budget cuts because of a mandate in the state constitution that the state provide all children in Arkansas with an adequate education. The state Supreme Court clarified the preeminence ofthat constitutional mandate in the Lake View school - funding case. That case lasted 15 years and finally ended in 2007.

The budget cuts were anticipated by many legislators after September’s dismal revenue report. State revenue for the month was down 14 percent from September of 2008, a decline of more than $76 million.

The state fiscal year runs from July 1 to June 30. One reason for cutting the budget now, relatively early in the fiscal year, is to give state agencies more time to absorb the impact. For example, budget officials don’t expect layoffs of state employees will be necessary as long as current job vacancies are left unfilled.

The Department of Correction, which operates state prisons, will have to postpone the expansion of a unit in Malvern. The Health Department will reduce anticipated funding of community health centers and purchases of ambulances for a new statewide trauma system.

A spokesman for the Human Services Department said no programs would be pared back, but the department would have to leave vacant job positions unfilled. Employees all across state government will have their travel expenses reduced or eliminated until the economy recovers. Institutions of higher education willconsider tuition increases to make up for the loss of state aid.

The legislature will consider budgets for state agencies when the General Assembly convenes in February for the first fiscal session in Arkansas history. If the economy does not rebound by then, legislators will face difficult decisions. During the fiscal session in February, the legislature will adopt state agency budgets for Fiscal Year 2011, which begins July 1, 2010.

The budget cuts come at a bad time for county officials seeking higher reimbursements from the state Correction Department for housing inmates. Earlier this month, more than 1,700 state inmates were being held in county jails because there wasn’t enough space to hold them in state prison units.

The state pays counties $28 a day per prisoner. Some county officials say the reimbursements are not enough to cover costs, and when they’re forced to hold state inmates it creates serious budget problems for their local jails.

If you have any questions or comments about legislative issues, please contact me at HendrenK @ arkleg.state.ar.us or call me at 479-787-6500, extension 30.

Opinion, Pages 5 on 10/28/2009

Print Headline: Capitol Reports State Government Budget Cut

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