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State Capitol Week in Review

LITTLE ROCK – When the 91st General Assembly convenes on January 9, lawmakers will quickly take up fiscal policy because the outcome of many proposed bills will depend on how much money is available.

That means one of the major questions for legislators will be how much of a tax reduction is possible, and which types of taxes will be lowered. The governor has proposed a drop in individual income taxes that would mainly benefit lower-income and middle-income families, saving them $50.5 million a year.

A separate income tax cut that has been proposed by Senate members is broader in scope and would reduce state revenues by about twice as much as the governor’s plan.

Legislators also will consider an income tax exemption on retirement benefits for military veterans that would save them about $13 million a year.

In preparation for the session, in October the legislature began budget hearings to review in detail spending requests from all state agencies. During the regular session lawmakers will balance spending bills with available revenue.

The Senate Education Committee recommended a 1 percent increase in funding for public schools, and because the state constitution mandates that the state provide an adequate education for all children in Arkansas that increase is likely to be approved.

Publicly-supported higher education in Arkansas consists of 10 four-year universities and the campuses at the medical school in Little Rock, plus 22 two-year colleges around the state. The governor has proposed a $10 million increase in the amount of their state aid, conditional on the legislature approving a new funding formula.

The new formula would reduce the current emphasis on raising enrollment and instead would provide financial rewards to institutions that improve graduation rates.

Setting up three “stabilization centers” for people going through a mental health crisis would require an additional $5 million in state spending. The idea has been endorsed by the governor, law enforcement and county officials. The centers would take the place of county jails as places to securely house people who are arrested and who are suffering from mental illness.

There would be no additional costs in governor’s plan to establish a new grant program for two-year college students who get degrees or certificates in high demand fields, such as welding or computer science. That’s because money would come from existing grant programs that are not being fully utilized.

A priority during the 2017 session will be improving education in high-tech fields and expanding job opportunities in those fields. The governor’s agenda includes setting up an “accelerator program “ to authorize state agencies to partner with private companies in order to create new jobs in the technology sector. The proposed budget for that program is about $2 million.

Also, the governor has proposed adding $5 million for schools to expand computer science offerings. Senate leaders have said that the education and job creation items on the governor’s agenda probably will not be controversial.

The governor also has proposed restoring funding to libraries and senior citizens’ centers, adding about $3 million to pre-kindergarten programs and hiring more case workers in the foster care and child welfare system.

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