LITTLE ROCK (AP) — Arkansas Gov. Mike Beebe said Wednesday he expects to propose an increase in public school funding but most state agencies won’t see a major change in next year’s budget as his administration prepares to release its revenue forecast.
Beebe won’t release his balanced budget proposal until Jan. 17, but the revenue forecast that will be detailed to lawmakers on Thursday will offer a glimpse at what to expect when the Legislature convenes next year. Beebe said the state’s general revenue has remained stable but that next year’s budget will have to take into account tax cuts and potential reductions in federal money for some agencies.
"It’s going to be a relatively flat budget," Beebe told reporters after speaking at the Arkansas Farm Bureau’s convention.
Beebe said he expects to recommend an increase in the per-student funding the state’s schools receive from the state, but he did not say how much of an increase. Arkansas public schools received a $55 million increase in the current year’s budget.
Beebe also said he didn’t expect to propose another cut in the state’s sales tax on groceries. Proposing a tax cut during the fiscal session, which is intended to focus on budget matters, would require a two-thirds vote in both chambers to be considered.
Since taking office, Beebe has successfully pushed for cutting the grocery tax to 1.5 percent from 6 percent. The most recent half-cent cut took effect in July and was part of a $35 million package that included a sales tax holiday and a reduction in the used car tax.
Arkansas’ $4.6 billion budget for the current year increased funding for schools and prisons. It kept state workers’ salaries flat after Beebe agreed to drop a cost-of-living raise in order to pay for additional tax cuts.
Beebe and legislative leaders said Wednesday the biggest concern heading into next year’s fiscal session is how potential budget cuts at the federal level could affect state agencies. When a deficit-reduction "supercommittee" was unable to find agreement by its deadline last week, it triggered spending cuts of $1.2 trillion starting in January 2013 and extending over 10 years.
"Agencies that rely more heavily on ongoing federal money will be more affected than those that don’t, obviously," Beebe said.
Rep. Kathy Webb, co-chairwoman of the Joint Budget Committee, said much of the Legislature’s work next year will depend on where the cuts come from. Arkansas relies on roughly $7.9 billion a year in federal funds.
"If we’re going to start seeing some serious cuts at the federal level, then we’re going to have some cuts at the state level," said Webb, D-Little Rock. "There are still a lot of things up in the air."
Arkansas revenues for the year to date are $9.9 million above forecast, according to figures released last month. The state ended its previous fiscal year in July with a $94 million surplus.