Legislative Updates — April 10, 2020

LITTLE ROCK – The sudden and severe economic downturn caused by the outbreak of the coronavirus means that the 2020 fiscal session will be the most difficult one for legislators since Arkansas voters first voted to establish fiscal sessions 12 years ago.


Usually, legislators focus on the details, rather than the broad outline of state agency budgets. They work on budget details within the framework of an official forecast, which over the years almost always calls for steady growth in revenue.


For example, from 2008 to 2018, state revenue increased by 35 percent, an average of 3.5 percent a year. During that 10-year period there was plenty of debate and political back-and-forth among legislators, but the disagreements were about details, not the overall forecast.


A simplified analogy is that every year the legislature builds a house, and on average it is 3.5 percent larger than the previous year. Every year the debate is how large the rooms will be. Human services, public schools, higher education and prisons compete to get the largest rooms.


In the past, national health care reform mandated that the legislature increase the relative size of the human services budget. In previous years the legislature had to enlarge the relative amount that the state spent on public education, because of settlements of school finance and desegregation lawsuits.


More and more, the war on illegal drugs creates public pressure to spend more on prisons and law enforcement.


The legislature must balance the competing demands for state dollars in order to balance the state budget every year. Unlike the federal government, Arkansas does not operate on deficits.


The task of balancing the state budget was made more difficult last week when the Department of Finance and Administration lowered its forecast for state revenue for next year.


That’s why the governor asked the legislature to help trim next year’s budget by $205 million while maintaining essential services. Those cuts come after state agencies were told that revenue would decrease by about $353 million in the current fiscal year, which ends on June 30.


The governor said that his priorities will be health, public education, Medicaid, prisons and law enforcement. The governor also proposed keeping some money in a flexible reserve fund, so that the state can plug any unexpected gaps in agency budgets that may arise.


During fiscal sessions, only budget bills are considered. There is a parliamentary mechanism for introducing a non-budget bill, but it sets a high bar. Sponsors must pass a resolution in each chamber by a two-thirds majority in order to even introduce a non-budget bill.


Arkansas voters approved a constitutional amendment in 2008 to set up fiscal sessions in even-numbered years. In odd-numbered years legislators meet in regular sessions. They are longer and much busier because in addition to budget bills, legislators consider non-budget bills on issues affecting most aspects of society.


During the fiscal session legislators are taking precautions to prevent any spread of the coronavirus.


Health technicians checked the temperature every person entering the Capitol. Most legislators are wearing face masks and trying to keep a distance of at least six feet from each other.


Members of the House of Representatives meet in the basketball arena of the University of Arkansas at Little Rock so they can socially distance from each other.


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