Arkansas state budget and finances

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Arkansas budget and finances
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General information
Budget calendar:
Biennial
Fiscal year:
2015
State credit rating:
AA (as of 2014)
Current governor:
Asa Hutchinson
Financial figures
Total spending (state and federal funds):
$22.6 billion (estimated for 2014)
Per capita spending:
$7,615 (estimated for 2014)
Total state tax collections:
$8.6 billion (2013)
Per capita tax collections:
$2,902 (2013)
State debt:
$37.7 billion (as of 2014)
Per capita state debt:
$12,785 (as of 2014)
State budgets and finances
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Total state expendituresState debtTax policy in Arkansas
Note: This page utilizes information from a variety of sources. As such, the currency of the information varies somewhat. The information presented on this page reflects the most recent data available as of February 2015.
Between fiscal years 2013 and 2014, total government spending in Arkansas increased by approximately $1 billion, from $21.6 billion in fiscal year 2013 to an estimated $22.6 billion in 2014. This represents a 4.6 percent increase. The cumulative rate of inflation during the same period was 1.58 percent, calculated using the Consumer Price Indices for January 2013 and January 2014. As of 2014, financial services firm Standard and Poor's had assigned Arkansas a credit rating of AA.[1][2][3]
In fiscal year 2014, total estimated spending in Arkansas amounted to $22.6 billion. In 2013 Arkansas dedicated 21 percent of its budget to Medicaid.

Spending

Definitions

The information below comes from the National Association of State Budget Officers (NASBO). These spending figures are broken into three broad categories in order to facilitate comparison between the states.[3]

  • State funds: State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."
  • Federal funds: Federal funds are "funds received directly from the federal government."
  • Total spending: Total spending is calculated by adding together the totals for state and federal funds.

These figures exclude spending from the sale of bonds.

2014 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2014 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.[3]

In 2014 total estimated spending in Arkansas was $22.6 billion. Estimated per capita spending in Arkansas amounted to $7,615, highest among its neighboring states.

Total estimated state spending, FY 2014 ($ in millions)
State State funds Federal funds Total spending Population Per capita spending
Arkansas $16,077 $6,511 $22,588 2,966,369 $7,614.70
Louisiana $17,683 $11,091 $28,774 4,649,676 $6,188.39
Mississippi $10,479 $8,197 $18,676 2,994,079 $6,237.64
Missouri $15,970 $7,208 $23,178 6,063,589 $3,822.49
Oklahoma $14,721 $7,425 $22,146 3,878,051 $5,710.60
Per capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census estimates.[4]
Source: National Association of State Budget Officers

Spending by function

See also: State spending by function as a percent of total expenditures
Breakdown of spending by function in FY 2013.
Source: National Association of State Budget Officers

State spending in Arkansas can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2013 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percentages, indicating the share of the total budget spent per category.[3]

In 2013 the largest single portion of Arkansas' budget was dedicated to Medicaid at 21 percent, smaller than the portions of its neighboring states. The state also dedicated a smaller portion of its budget to K-12 education and transportation than its neighbors.

State spending by function as a percent of total expenditures, FY 2013
State K-12 education Higher education Public assistance Medicaid Corrections Trans-
portation
Other
Arkansas 15.6% 15.4% 2% 21% 2.1% 5.8% 38%
Louisiana 19.3% 10.3% 0.5% 25.1% 3% 6.2% 35.7%
Mississippi 16.4% 16.1% 5.9% 26.1% 2% 6.7% 26.7%
Missouri 22.8% 4.8% 0.7% 35.8% 2.7% 9.4% 23.8%
Oklahoma 16.2% 22.7% 0.9% 23% 2.6% 7.1% 27.5%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Spending trends

From 2009 to 2013, the portions of Arkansas' budget dedicated to Medicaid and transportation increased. The portions dedicated to K-12 and higher education decreased. See the table below for further details (figures are rendered as percentages, indicating the share of the total budget spent per category).[3][5][6][7][8]

Spending by function from 2009 to 2013 (as percentages)
Year K-12 education Higher education Public assistance Medicaid Corrections Transportation Other
2013 15.6% 15.4% 2% 21% 2.1% 5.8% 38%
2012 16.3% 16.2% 2.1% 21.4% 2.2% 5.8% 36.0%
2011 17.2% 15.8% 2.2% 21.1% 2.2% 5.2% 36.3%
2010 17.2% 15.3% 2.2% 20.0% 2.1% 4.9% 38.2%
2009 17.7% 16.8% 2.1% 19.7% 2.2% 5.1% 36.4%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Revenues

2013 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "population" and "per capita revenue" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "population" and "per capita revenue" have not been abbreviated).[9]

In 2013 state tax collections in Arkansas totaled $8.6 billion. Per capita tax collections in Arkansas totaled $2,902, highest among its neighboring states.

State tax collections by source ($ in thousands)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes Total 2013 population Per capita collections
Arkansas $1,022,066 $4,019,203 $356,920 $2,649,577 $402,874 $135,767 $8,586,407 2,958,765 $2,902.02
Louisiana $52,686 $4,974,642 $369,930 $2,739,983 $252,430 $834,158 $9,223,829 4,629,284 $1,992.50
Mississippi $24,122 $4,571,294 $530,010 $1,755,424 $415,980 $105,895 $7,402,725 2,992,206 $2,474.00
Missouri $29,896 $4,791,043 $550,824 $5,380,651 $377,258 $11,073 $11,140,745 6,044,917 $1,842.99
Oklahoma N/A $3,848,451 $1,010,430 $2,916,615 $585,146 $531,861 $8,892,503 3,853,118 $2,307.87
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
Arkansas tax collections by source in 2013.
Source: Tax Policy Center

The table below lists 2013 tax collections by source as percentages of total collections. Sales taxes and gross receipts accounted for the bulk of tax collections in Arizona at 46.8 percent.[9]

State tax collections by source (as percentages)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes
Arkansas 11.90% 46.81% 4.16% 30.86% 4.69% 1.58%
Louisiana 0.57% 53.93% 4.01% 29.71% 2.74% 9.04%
Mississippi 0.33% 61.75% 7.16% 23.71% 5.62% 1.43%
Missouri 0.27% 43.00% 4.94% 48.30% 3.39% 0.10%
Oklahoma N/A 43.28% 11.36% 32.80% 6.58% 5.98%
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014

Current fiscal year budget

See also: Historic Arkansas budget and finance information

Fiscal year 2015

DocumentIcon.jpg See budget bill: H.B. 1159

Governor Mike Beebe announced his fiscal year 2015 budget proposal on January 14, 2014. Under the governor's proposal, total general fund spending for fiscal year 2015 would have equaled approximately $5 billion, including $65 million "to increase base funding for public schools by 2.0 percent." In addition, Beebe's budget proposal included $10 million in additional funding for state prisons.[10]

In March 2014, Beebe signed into law the fiscal year 2015 budget, which included general fund spending totaling $5 billion. The enacted budget closely resembled Beebe's proposal. The enacted fiscal year 2015 budget increased general fund spending by 2 percent over fiscal year 2014.[10]

State debt

See also: State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Arkansas had a state debt of approximately $37.7 billion. Its state debt per capita was $12,785. The report revealed that state governments faced a combined $5.1 trillion in debt. The obligation amounted to $16,178 per capita in the nation.[11]

Total state debt, 2014
State Total state debt State debt per capita Per capita debt ranking
Arkansas $37,704,936,000 $12,785 33
Louisiana $83,280,815,000 $18,097 15
Mississippi $54,686,815,000 $18,321 14
Missouri $76,489,010,000 $12,702 34
Oklahoma $44,151,947,000 $11,574 40
Sources: State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014

Public pensions

See also: Arkansas public pensions and Arkansas public employee salaries

A 2012 report from the Pew Center on the States noted that Arkansas's pension system was funded at 75 percent at the close of fiscal year 2010, below the 80 percent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[12]

Taken together, the funding ratio for the state's pension systems decreased from 74.20 percent in fiscal year 2010 to 71 percent in fiscal year 2012, a decrease of 3.2 percentage points, or 4.31 percent. Likewise, unfunded liabilities increased from approximately $6.5 billion in fiscal year 2010 to more than $8 billion in fiscal year 2012.[13][14][15][16][17][18]

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This in turn results in lower interest costs, thereby lowering the cost to taxpayers.[19][20]

The table below lists the Standard and Poor's credit ratings for Arkansas and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.[21]

State credit ratings, 2004 to 2014
State 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
Arkansas AA AA AA AA AA AA AA AA AA AA AA
Louisiana AA AA AA AA AA- AA- A+ A A A A+
Mississippi AA AA AA AA AA AA AA AA AA AA AA
Missouri AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA
Oklahoma AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA AA AA AA
Source: Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014

Federal aid to state budget

See also: Federal aid to state budgets

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[22]

The table below notes what share of Arkansas’s general revenues came from the federal government in 2012. That year, Arkansas received approximately $5.9 billion in federal aid, 34.5 percent of the state's total general revenues. Figures from surrounding states are provided for additional context.[22]

Federal aid to state budgets, 2012
State Total federal aid ($ in thousands) Federal aid as a % of general revenue Ranking
Arkansas $5,900,988 34.46% 21
Louisiana $11,136,334 43.96% 2
Mississippi $7,725,294 45.35% 1
Missouri $10,440,927 39.42% 5
Oklahoma $7,363,043 35.57% 15
Source: United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014

Stimulus

According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, Arkansas received $2,097,950,000.00 in federal funding between February 2009 and June 2013.[23]

Budget process

The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[24][25]

  1. Budget instructions are sent to state agencies in May of the year preceding the start of the new biennium.
  2. State agencies submit their budget requests to the governor in July.
  3. Agency hearings are held from August through October.
  4. Public hearings are held from October through December.
  5. The governor submits his or her proposed budget to the state legislature in November.
  6. The state legislature debates the budget from January through April. The budget must be passed by a three-fourths majority.
  7. The fiscal year begins July 1.

Arkansas is one of 44 states in which the governor has line item veto authority.[25]

The governor is required by statute to submit a balanced budget. The legislature is not legally required to pass a balanced budget, but the governor is required by statute to sign a balanced budget.[25]

Agencies, offices and committees

The following standing committees in the Arkansas General Assembly deal with budget and finance matters:

  1. Joint Budget Committee, Arkansas General Assembly
  2. Revenue and Taxation Committee, Arkansas House of Representatives

The Arkansas Treasurer oversees the deposits and withdrawals of the state's bank account, manages the state's investments, and provides state aid to local governments. The office is elected in partisan midterm elections every four years.[26]

The Arkansas Auditor of State is the state's accountant, overseeing the finances of all state departments and managing the payrolls of the states Executive, Legislative, and Judicial branches. The office is elected in partisan midterm elections every four years.[27]

Studies and reports

U.S. PIRG "Following the Money" report

See also: "Following the Money" report, 2014

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[28] According to the report, Arkansas received a grade of B- and a numerical score of 82, indicating that Arkansas was "advancing." in terms of transparency regarding state spending.[28]

Budget and finance ballot measures

Voting on
state and local
government budgets,
spending and finance
State finance.jpg
Policy
Budget policy
Ballot measures
By state
By year
Not on ballot
See also: Spending and finance on the ballot and List of Arkansas ballot measures

Ballotpedia has tracked 6 ballot measures relating to state and local budget and financial matters in Arkansas.

  1. Arkansas Budget System, Act 1 (1932)
  2. Arkansas Competitive Bidding for Printing Contracts, Proposed Amendment 54 (1974)
  3. Arkansas County Building Construction, Proposed Amendment 25 (1938)
  4. Arkansas Funding for Education Amendment (2016)
  5. Arkansas Interest Rates Establishment, Proposed Amendment 60 (1982)
  6. Arkansas Revenues for Debt Refunding, Proposed Amendment 31 (1940)

Recent news

This section displays the most recent stories in a Google news search for the terms "Arkansas budget."

All stories may not be relevant to this page due to the nature of Google's news search engine.

Arkansas state budget and finances - Google News Feed

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Contact information

Physical address:
Arkansas Department of Finance and Administration; Office of Budget
1509 W. 7th St., Room 402
Little Rock, AR 72201
Telephone: 501-682-1941
Fax: 501-682-1086

Mailing address:
PO Box 3278
Little Rock, AR 72203

See also

External links

Additional reading

References

  1. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  2. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 National Association of State Budget Officers, "State Expenditure Report: 2012-2014," accessed February 18, 2015
  4. United States Census Bureau, "State and County QuickFacts," accessed February 23, 2014
  5. National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  6. National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  7. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  8. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  9. 9.0 9.1 Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "Summaries of Fiscal Year 2015 Proposed and Enacted Budgets," July 11, 2014
  11. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  12. "Widening Gap Update: Arkansas," June 18, 2012
  13. Arkansas Public Employees Retirement System, "Actuarial Valuation and Experience Gain/(Loss) Analysis," June 30, 2012
  14. Judicial Retirement System, ""Actuarial Valuation and Experience Gain/(Loss) Analysis," June 30, 2012
  15. State Police Retirement System, "Actuarial Valuation and Experience Gain/(Loss) Analysis," June 30, 2012
  16. Teacher Retirement System, "2012 Comprehensive Annual Financial Report," accessed October 30, 2013
  17. State of Arkansas, "2012 Comprehensive Annual Financial Report," accessed October 30, 2013
  18. Local Police and Fire Retirement System, "Compiled Annual Actuarial Valuations Report as of December 31, 2012," accessed October 30, 2013
  19. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  20. Bankrate, "The 6 states with the worst credit ratings," September 27, 2012
  21. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014
  22. 22.0 22.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  23. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  24. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting," updated April 2011
  25. 25.0 25.1 25.2 National Association of State Budget Officers "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  26. Arkansas State Treasury, "About," accessed June 17, 2011
  27. Arkansas State Auditor, "About Our Office," accessed March 12, 2015
  28. 28.0 28.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014