Arkansas state budget and finances

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Arkansas state budget

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Budget calendar:  Annual
Fiscal year:  2013
Date signed:  March 5, 2012
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Arkansas operates on an annual budget cycle. Its fiscal year begins July 1.

Gov. Mike Beebe signed the $4.7 billion budget Arkansas FY2013 state budget into law on March 5, 2012.[1] Highlights of the budget included $114 million funding increase for Medicaid and $56 million more for public schools while agency funding remained static.[1]

As of October 2011, Arkansas had a total state debt of approximately $25,020,643,000, when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and 2011 budget gap. [2]

As of October 2012, Arkansas's total state debt per capita was $8,492.56.[3]

See also: The Arkansas State Budget on State Budget Solutions

Federal Aid to State Budget

The chart below represents how much of the state’s budget comes from the federal government. The number is the corresponding ranking in relation to the rest of the nation (if #1, the state receives the highest percentage of federal funding in the nation):

State 2008 2009 2010 2011
Arkansas 30.7% (#22) 32.53% (#28) 36.22% (#26) 36.17% (#27)
  • Figures are calculated by dividing each state’s intergovernmental revenue into its general revenue.[4][5]

FY2013 State Budget

Gov. Mike Beebe signed the $4.7 billion FY2013 budget into law.[6] The budget was nearly identical to the budget Beebe proposed in January. It increased Medicaid funding by $114 million and K-12 public school funding by $56 million. The funding other state agency funding will remain the same as in FY2012.[6]

The budget was contained in House Bill 1005 found here.

Governor's Proposed Budget

Gov. Beebe proposed a $4.7 billion state budget on Jan. 17, 2012, which increased spending over the prior year by $163 million. [7] Many of the reductions came from one-time items in the FY2012 budget that do not continue in FY2013.[8]

The new money in the governor's proposal included:

  • $114 million would be used to pay for growth in Medicaid;[1]
  • $56 million in additional funding for public K-12 schools;
  • $2.1 million in increased funding for prisons;
  • $3.6 million for some higher education institutions.[9]

The budget did not include a cost of living raise for state employees. The governor said he thought the raise would be a good idea but he did not know how to pay for it without reducing vital services.[10]

The legislative fiscal session began Feb. 13, 2012, [11] and was designed to focus primarily on budget issues.[12] The Joint Budget Committee's budget was nearly identical to the governor's proposed budget.[13] The governor signed the $4.7 billion budget into law on March 5, 2012.[14]

FY2012 State Budget

On Nov. 10, 2010, Gov. Beebe presented his FY2012 $4.6 billion budget proposal.[15][16] [17]

Education Spending

For FY2012, Arkansas devoted 34.7% of its total spending to education, up from 36.0% in FY2009.[18]

Fiscal Year Total Spending[19] Education Spending[20] Percent Education Spending
2009 $20.5 billion $7.4 billion 36.0%
2010 $21.6 billion $7.5 billion 34.7%
2011 $21.6 billion $7.5 billion 34.7%
2012 $$21.9 billion $7.6 billion 34.7%

Governor's Proposed FY2012 State Budget

The governor's proposed FY2012 budget of $4.6 billion was 2.5% higher than that of FY2011, with approximately $109 million more in spending.[15]

The budget's only tax cut was to reduce grocery taxes by half a percent, from 2% down to 1.5%.[15] The budget called for $55 million more for public schools, an increase of 2.9%, and increasing the Human Services budget by nearly $6 million, around 0.6%.[15] It also provided state employees with a 1.86% cost-of-living increase in pay, which will cost about $23 million.[15]

Budget transparency

See also: Evaluation of Arkansas state website
See also: Constitutional provisions regarding reading of bills

Arkansas does not have a constitutional provision providing a period of legislative review before the legislature can vote on a budget bill.

Arkansas launched its statewide, official spending database online here on July 6, 2012.[21] The Department of Finance and Administration has created a statewide contracts procurement Web site.

The good

  • Site has a search function and is easy to navigate.
  • Expenditures are updated daily.[22]
  • Revenues are listed by source, type, agency and functions.[23]
  • Employee salaries are listed and updated monthly.[24]
  • Budget is published.[25]
  • Elected officials are listed with contact information under their respective office.[26]
  • Administrative officials are listed with contact information under respective agencies.[27]
  • Information on the state ethics commission is provided.[28]
  • State tax information is posted.[29]
  • Annual financial audits are published.[30]
  • Statewide contracts are published, with standard contracts in excess of $25,000 published, construction contracts in excess of $20,000 published, and single purchase orders in excess of $25,000 published.[31]

The bad

  • Full text of the Arkansas Freedom of Information Act is posted, but no form/contact information for requesting records is provided.[32]
  • Only provides lobbyist forms[33], no information on state paid lobbying or database of registered lobbyists.


In 2011, the State approved a proposal by Lieutenant Governor Mark Darr to create a state "online checkbook." The website, which will contain information on all state expenditures, had an upfront cost of $550,000 for the initial creation of the site. Ongoing site operations are estimated at $250,000 annually.[34] The Lt. Gov.'s statement upon implementation of the online checkbook can be found here.

Government tools

The following table is helpful in evaluating the level of transparency provided by the state on budget and spending related activities. Arkansas does not have a specific state spending and transparency database, but it does 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]
600px-Red x.png
  • The website has a search function.[35]
  • State contracts are posted, but dollar amounts are not included.[36] Current bids and potential awards are listed. [37]
  • Grant programs are listed, but specific information on them is not.[38]
  • Agency budget totals are available. [39] [40] [41]
  • Line item, actual expenditures are not published.
  • Public employee salaries are not available. Pay schedules are posted. [42]

Independent transparency sites


Multi-Measure Budget Transparency Profile

The Institute of Government and Public Affairs at the University of Illinois has created a multi-measure transparency profile for Arkansas, which measures state transparency as of September 2011 using indicators from a range of organizations, including Sunshine Review. These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.

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 has been credited with keeping the state’s budget deficits low and manageable during difficult times.[43]

Arkansas voters approved a constitutional amendment in November, 2008 requiring annual legislative sessions and appropriations no longer than one fiscal year effective in 2009.[44] Previously, Arkansas’ legislature met and budgeted on a biennial basis. Annual budget began in FY2010.[45]

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.[46]

When crafting the state budget, state agencies project what funding is needed to operate their programs and those funding requests are then divided into three categories: A, B and C.

  • Category A is essential programs, including education, corrections, public assistance, transportation and Medicaid.
  • Category B is cost-of-living increases for all agencies, necessary expansions of programs like Medicaid, and new programs that fill a critical need. The state’s $10 million community corrections project, for example, went into this category.
  • Category C is a wish list of new programs lawmakers and agency heads would like to start.

Funding goes first to the items in category A, and then on to category B, and if anything is left over, some C projects may get funded. If revenues fall short of initial projections, the chief fiscal officer can make across-the-board cuts — first from C, then from B, and lastly from A.[47]

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

Accounting principles

See also: Arkansas government accounting principles

The Arkansas Division of Legislative Audit is responsible under the Legislative Joint Audit Committee (A.C.A. 10-3-407)[48] for independent auditing of state and local entities.

Roger A. Norman is the current Arkansas Legislative Auditor. Audit reports are published on the division’s Web site.[49]

Credit Rating Fitch Moody's S&P
Arkansas[50] NR Aa2 AA

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


Between February 2009 and June 2013, Arkansas received $2,097,950,000.00 in federal funding.[51]

Public Employees

See also: Arkansas public employee salaries
See also: Arkansas public pensions

According to 2008 Census data, the state of Arkansas and local governments in the state employed a total of 190,155 people.[52] Of those employees, 155,216 were full-time employees receiving a net pay of $478,078,745 per month and 34,939 were part-time employees paid $24,804,627 per month.[52] More than 40% of those employees, or 32,278 employees, were in education or higher education.[52]

See also

External links

Additional reading


  1. 1.0 1.1 1.2 Arkansas Online "Beebe signs $4.7B budget into law" March 5, 2012
  2. State Budget Solution “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
  3. State Budget Solutions "State debt more than $37,000 per private worker, $13,000 per capita" Oct. 2, 2012
  4. US Census Federal Aid to State and Local Governments
  5. Tax Foundation' "Monday Map: Federal Aid to State Budgets. Accessed October 15, 2013
  6. 6.0 6.1 "Beebe signs $4.7B budget measure into law" March 5, 2012
  7. CBS News "Beebe proposes $163M increase in Ark. budget" Jan. 17, 2012
  8. Yahoo! "Beebe proposes $163M increase in Ark. budget" Jan. 17, 2012
  9. [1]
  10. Stuttgart Daily Leader "Beebe says he's open to ideas to fund pay raises" Jan. 19, 2012
  11. Arkansas News "Beebe proposes $163 million budget increase for next fiscal year" Jan. 17, 2012
  12. "Arkansas lawmakers convene for fiscal session" Feb. 13, 2012
  13. "Arkansas lawmakers expected to finalize budget" Feb. 27, 2012
  14. Arkansas Online "Beebe signs $4.7B budget into law" March 5, 2012
  15. 15.0 15.1 15.2 15.3 15.4 Businessweek "Arkansas gov proposes $4.6B budget for coming year" Nov. 10, 2010
  16. Arkansas News "Lawmakers to begin budget review next month" Sept. 13, 2010
  17. Arkansas News "Lawmakers begin fall budget hearings" Oct. 5, 2010
  18. State Budget Solutions "Throwing Money At Education Isn't Working" Sept. 12, 2012
  19. "Arkansas Government Spending Chart - Total Spending" Aug. 4, 2012
  20. "Arkansas Government Spending Chart - Education Spending"Aug. 4, 2012
  21. [2]
  22. Expenditures
  23. Revenues
  24. Employee Salaries
  25. Budget
  26. State Government
  27. Agencies
  28. Arkansas Ethics
  29. Taxes
  30. Accounting Reports
  31. [3]
  32. AK FOIA
  33. Lobbying Forms
  34. Government Technology "New Arkansas Site Reveals State Salaries" July 6, 2012
  35. Arkansas Department of Finance and Administration (DFA)
  36. DFA - State Contracts
  37. Current Bid Proposals
  38. Grant Programs
  39. Agency Actual Expenditures
  40. Annual Operations Plan
  41. Funded Budget by Fund Source
  42. Payroll
  43. Arkansas Business, “1945 Act keeps State's budget consistent,” January 19, 2009
  44. Arkansas Bureau of Legislative Research, “Arkansas Budget & Appropriations Process 2008” (PPT)
  45. National Conference of State Legislators "Annual and Biennial Budgeting: The Experience of State Governments"
  46. National Association of State Budget Officers, “2008 Budget Processes in the States”
  47. "The Arkansas approach: How one state has avoided fiscal disaster" Sept. 20, 2011
  48. Arkansas Legislative Joint Audit Committee Web site, retrieved October 9, 2009
  49. Arkansas Division of Legislative Audit Web site, retrieved October 9, 2009
  50. California State Treasurer, “Comparison of Other States’ General Obligation Bond Ratings”
  51. Recovery, "Stimulus Spending by State"
  52. 52.0 52.1 52.2 2008 Arkansas Public Employment U.S. Census Data