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Arkansas state budget (2010-2011)

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Find the state’s FY2011 Comprehensive Annual Financial Report (CAFR) compiled by the state government online.[1]

2011 State spending & deficit in billions[2]
Total spending Human services Education Transport Other
$27.1 $7.4 $10 $1.6 8.1
2011 Local spending & deficit in billions[3]
Total spending Pension Healthcare Education Welfare Protection Transport Debt
$9.83 $0.04 $0.22 $4.85 $0.19 $0.96 $0.62 $10.7

Arkansas's state budget for FY2011 was $4.5 billion and it became law on Feb. 26, 2010.[4] Arkansas was one of only four states in the U.S. to enter fiscal year 2011 without an official deficit.[5] Governor Mike Beebe said “conservative budgeting and cautious spending had put Arkansas in an advantageous position.”[6]

Over the five-year period leading up to the 2011 fiscal year, Arkansas state government grew by an average of about 7%. The biggest year of growth was for fiscal year 2005 when the state budget grew by 10.88%.[7]

The state met its $4.4 billion budget for FY2010 with $23.7 million left over, according to the state's fiscal office, and did so by tapping its newly established “rainy day” fund, using unspent educational facilities funds, and making $206 million in budget cuts. cut the state budget twice by $100 million in October 2009 and by $106 million in January 2010 due to shortfall in revenues. The state did not had layoffs or reductions in services for FY2010.[6] The state budget for FY2011 was $4.4 billion.[6]

Arkansas had a total state debt of $7,899,579,400 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap.[8]

Arkansas began FY2011 ahead of expectations as the state collected more taxes than predicted in July 2010, the first month of the fiscal year.[9] The state Department of Finance and Administration said that Arkansas' net available general revenues totaled $370.6 million in July. Individual income tax collections totaled $181.2 million, which was $7.4 million above the previous year and $3.4 million above forecast; sales tax collections totaled $188.3 million, which was $15.4 million above the previous year and $4.9 million above forecast; corporate taxes were also up.[9]

The FY2011 budget did not include cost-of-living increases for state employees.[10][11]

Federal Stimulus

Arkansas received approximately $220 million from HR 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[12][13]

Arkansas borrowed more than $300 million from the federal government for its unemployment insurance fund.[14] The state had yes not determined how it would repay that money, which was likely to be a major budget issue in January's legislative session.[15]

Arkansas was one of a handful of states with a balanced budget and public education was the top budget priority in the state.[16] Because the state's eduction budget was balanced, Gov. Beebe's administration said it was not clear that the state would be permitted to use the $90 million in federal funds for education for other school purposes.[16] Without many teachers facing layoffs, the state instead would use the money for a variety of one-time costs, including buildings, roofs, heating and air conditioning equipment, and school laboratory equipment.[17][16] “My preliminary reading of this bill was you’ve got to use this money to keep from firing teachers, or rehiring teachers who had been fired, and we didn’t did any of that,” Beebe said.[16]


FY2010 state budget

Arkansas' fiscal office reported that the state met its $4.4 billion budget for fiscal 2010 with $23.7 million left over.[6] In FY2010, gross tax collections totaled $5.43 billion, a decrease of $130.7 million, which was 2.4% less than the previous year.[5] Lawmakers did so by tapping its newly established “rainy day” fund and unspent educational facilities fund.[6][8]

According to January 2010 reports the state of Arkansas collected $20.9 million less in tax revenues than estimated for the month of December 2009. Total state revenues for 2009 were $54.9 million below predictions. State tax revenue from July through December 2009 totaled $2.58 billion, 3% below 2008 levels and 1.9% below predictions. The drop in revenues led to an announcement by Gov. Beebe that if revenues continue to fall $100 million would be cut from the 2010 state budget.[18][19]

In January 2010, Gov. Beebe said he intended to cut the state's budget by $106 million, or 2.4% after the state's Department of Finance and Administration said that the state's revenues came in below forecast in the last quarter of 2009. At the same time, the state lowered its estimate of income in fiscal year 2011 by 0.4 percent, a reduction of $19.4 million from the forecast the government issued in December 2009.

Arkansas' unemployment rate increased to 7.7% in December 2009, a three-tenths of a percentage increase from November. Compared to December 2008, Arkansas saw a 2% increase in 2009. The national unemployment rate for December was 10%.[20]

The state weathered the 2009 state budget storm better than most states due to its conservative budgeting system. FY 2010’s $4.6 billion budget estimated a $75 million deficit to be filled by Arkansas’ recently established “rainy day” fund.[21] The Arkansas State Legislature set aside $100 million of surplus to cover FY 2010. Fifty-four percent of the state’s revenue was from income taxes and 38% from sales/use taxes. 42% ($1.9 billion) of state spending was on public schools, 25% ($1.1 billion) on health/human services, and 16% ($730 million) on higher education.[21]


Budget background

Arkansas’ Revenue Stabilization Law (Act 311 of 1945) requires the state to designate budget funding to be prioritized into 3 categories: A, B-1, and B. FY 2010 budget funded all A level budgets 100% with partial funding for B level budgets at 54%. New programs must start in the B category. This innovative model had been credited with keeping the state’s budget deficits low and manageable during difficult times.[22]

Arkansas voters approved November 4, 2008 a constitutional amendment for annual legislative sessions and appropriations no longer than 1 fiscal year effective in 2009.[23] Previously, Arkansas’ legislature met and budgeted on a biennial basis. Annual budget began in FY2010.[24]

The budget schedule requires the Governor to submit his budget to the Legislature in November before they convene. The Legislature meets January to April (January 12 to May 1 in 2009) and needs a three-fourths majority to pass the budget. The fiscal year begins July 1st and ends June 30th.[25]

See Arkansas state budget (2008-2009) for more information.

Accounting principles

See also: Arkansas government accounting principles

The Arkansas Division of Legislative Audit was responsible under the Legislative Joint Audit Committee (A.C.A. 10-3-407)[26] for independent auditing of state and local entities.[27]

Roger A. Norman was Legislative Auditor. Audit reports were published on the division’s Web site.[28]

Credit Rating Fitch Moody's S&P
Arkansas[29] NR Aa2 AA

The Institute for Truth in Accounting (IFTA) rated Arkansas “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider Arizona’s CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[30] Arkansas’ Department of Finance and Administration, Office of Accounting was responsible for filing the CAFR. Richard Weiss was the Director of Finance and Administration.[31]

Arkansas had no statewide, official spending database online. However, the Department of Finance and Administration had created a statewide contracts procurement Web site.


Budget transparency

Arkansas had no statewide, official spending database online. However, the Department of Finance and Administration had created a statewide contracts procurement site.[32]

HB 1053, known as "The Open Checkbooks in Government Act" would have created an online database of state expenditures. Unfortunately, HB 1053 died in committee.[33] "See proposed changes to Arkansas FOIA for more information.

See also: Evaluation of Arkansas state website

Economic Stimulus Package

Arkansas was expected to receive approximately $2.1 billion from the $787 billion economic stimulus package, or the American Recovery and Reinvestment Plan. According to White House officials the stimulus bill was estimated to create or save 31,000 jobs.[34] Gov. Beebe said that a state run site was being created to track Arkansas' use of the federal stimulus money. "This was your money — and your leaders should be held accountable for how it was managed," he said.[35]

According to preliminary reports Arkansas was expected to receive:[36][37]

  • $325.5 million for state infrastructure projects
  • $26 million was directed to transportation-enhancement projects and metropolitan planning projects
  • $117.7 million was obligated to "shovel-ready projects"
  • $7 million for Head Start
  • $1 million for the national school lunch program
  • $444 million for Kindergarten through 12th grade school modernization, renovation or repair
  • $857,000 for senior meal programs
  • $39.2 million to fund state government energy technology research and development programs
  • $730 million for Medicaid

The good

  • Site had a search function and was fairly easy to navigate.
  • Budget was published.[38]
  • Elected officials were listed with contact information under their respective office.[39]
  • Administrative officials were listed with contact information under respective agencies.[40]
  • Information on the state ethics commission was provided.[41]
  • State tax information was posted.[42]
  • Annual financial audits were published.[43]
  • Statewide contracts were published.[44]

The bad

  • Full text of the Arkansas Freedom of Information Act was posted, but no form/contact information for requesting records was provided.[45]
  • Only provides lobbyist forms[46], no information on state paid lobbying or database of registered lobbyists.

Government tools

The following table was helpful in evaluating the level of transparency provided by the state on budget and spending related activities. Arkansas did not had a specific state spending and transparency database, but it did provide spending information on its government website:

Criteria for evaluating spending databases
State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary
Arkansas Department of Finance and Administration
{{{1}}}
P
Partial.png
{{{1}}}
{{{1}}}
{{{1}}}
P
Partial.png
  • The website had a search function.[47]
  • State contracts were posted.[48] Current bids and potential awards were listed.[49]
  • Grant programs were listed, but specific information on them was not.[50]
  • The budget by agencies was available and posted by line-item.[51][52][53]
  • Public employee salaries were not available. Pay schedules were posted.[54]

Economic stimulus transparency

  • The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the United States. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.[55]
  • Arkansas would receive an estimated $2.1 billion.<ref name="StimulusTotal"/


See also

External links

Additional reading

References

  1. 2011 CAFR
  2. State of Arkansas, Appropriation Summary
  3. USA Spending, State Guesstimated* Government Spending
  4. Arkansas News "Beebe signs lottery scholarships, budget spending bills" Feb. 26, 2010
  5. 5.0 5.1 The City Wire "Arkansas' budget issues less severe than most states" August 2, 2010
  6. 6.0 6.1 6.2 6.3 6.4 "State ends year with $23 million surplus" July 2, 2010
  7. Arkansas News "Does the state budget need a diet?" March 14, 2010
  8. 8.0 8.1 State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
  9. 9.0 9.1 Businessweek "Ark. revenues begin fiscal year above predictions" August 4, 2010
  10. Arkansas News, "Lawmakers Wrap Up Budget Hearings," January 21, 2010
  11. ABC News, "Gov. Beebe Agrees to Cut Arkansas Budget by $106M," January 11, 2010
  12. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  13. H.R. 1586
  14. State Budget Solutions "States See Budget Surpluses" Sept. 28, 2010
  15. The City Wire "Arkansas’ budget issues less severe than most states" August 1, 2010
  16. 16.0 16.1 16.2 16.3 Arkansas News "State-aid bill clears U.S. house; Boozman votes no" August 11, 2010
  17. CNNMoney.com "States playing fast and loose with teachers' jobs money" Sept. 20, 2010
  18. The City Wire, "Arkansas tax collections continue decline," January 5, 2010
  19. Associated Press, "Arkansas: Tax Collections were Down," January 5, 2010
  20. Arkansas News, "State unemployment rises," January 24, 2010
  21. 21.0 21.1 Arkansas State Legislature, “Summary of Fiscal Legislation 2009,” May 6, 2009
  22. Arkansas Business, “1945 Act keeps State's budget consistent,” January 19, 2009
  23. Arkansas Bureau of Legislative Research, “Arkansas Budget & Appropriations Process 2008” (PPT)
  24. National Conference of State Legislators "Annual and Biennial Budgeting: The Experience of State Governments"
  25. National Association of State Budget Officers, “2008 Budget Processes in the States” (dead link)
  26. Arkansas Legislative Joint Audit Committee Web site, accessed October 9, 2009
  27. The Arkansas Division of Legislative Audit
  28. Arkansas Division of Legislative Audit Web site, accessed October 9, 2009
  29. California State Treasurer, “Comparison of Other States’ General Obligation Bond Ratings”
  30. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  31. Arkansas DFE, "Organizational Chart"
  32. Department of Finance and Administration contracts procurement
  33. Arkansas Legislature, Status of HB 1053
  34. Associated Press, "Stimulus estimates for Arkansas range from $2.1 billion to $4 billion," February 23,2009
  35. "Arkansas Recovery Web Site Now Online," May 9, 2009
  36. Texarkana Gazette, "Arkansas to get $351.5 million for infrastructure," February 25,2009
  37. Arkansas Matters, "Arkansas' Share of Stimulus Package," February 23,2009 (dead link)
  38. Budget
  39. State Government
  40. Agencies
  41. Arkansas Ethics
  42. Taxes
  43. Accounting Reports
  44. Contracts
  45. AK FOIA (dead link)
  46. Lobbying Forms
  47. Arkansas Department of Finance and Administration (DFA)
  48. DFA - State Contracts
  49. Current Bid Proposals
  50. Grant Programs
  51. Agency Actual Expenditures
  52. Annual Operations Plan
  53. Funded Budget by Fund Source
  54. Payroll
  55. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009