From the quiet hallways of the most beautiful state Capitol in our nation, this is Senator Keith Ingram.
One of the financial consequences of the coronavirus outbreak is that cities and towns may not receive as much in state turn back next fiscal year.
It depends on how quickly and effectively we’re able to control the spread of the virus. The sooner we open up the economy again, the more likely we can fully fund county and municipal aid.
During the recent fiscal session, the legislature changed the traditional funding formula for city and county turnback.
Previously, all of turnback funding was in Category A of the Revenue Stabilization Act, which meant that they had top priority.
Unless there was a catastrophe, 100 percent of Category A would be funded, and therefore all of city and county turnback would be funded.
Legislators had to make a lot of tough budget decisions during the fiscal session, due to the sudden and severe economic downturn caused by the coronavirus.
We had to dip into reserve funds to make ends meet for the remainder of the current fiscal year. The state had to significantly lower its forecast for next year’s budget.
Working from a much lower forecast for next year, the legislature placed 85 percent of turnback into Category A.
Additional turnback funding was gradually placed in lower spending priorities - 5 percent was put in Category B, another 5 percent in Category C and the final 5 percent in Category D.
This is not the time to sugarcoat things. Unless the economy improves dramatically this summer, it’s doubtful that Category D will be funded.
In other words, Arkansas cities should prepare to get by with 5 percent less in state turnback than they are scheduled to receive in Fiscal 2020.
Just about every elected official I know, from the national to the local level, emphasizes the wisdom of balancing budgets.
It’s the prudent thing to do, although I realize it isn’t easy. Over the long term, state government will be better able to provide essential services if it continues to operate under a balanced budget.
In the 1920s and 1930s, Arkansas spent more than it brought in, until the state could barely afford to make its bond payments. The impact on state finances was felt for decades.
We finally got back on our feet, financially speaking, and the legislature passed the Revenue Stabilization Act in 1945.
The fiscal session produced other important legislation for cities, especially during this period of coronavirus.
Act 2 of 2020 allows city board and quorum courts to meet virtually, using video technology and telephones. Of course, the virtual meetings must be open to the public, and they must be recorded, just like any traditional public meeting.
But members of the government body do not have to be physically present.
Also during the fiscal session, the legislature appropriated $2 million for the expenses of local governments trying to expand their broadband access.
In order to qualify for grants and loans, cities must complete a due diligence business study. Typically, local governments have not budgeted for that type of study, so when they would apply for a grant to expand their Internet capacity, they start off in the hole.
Now, with help from the legislature, cities will be better prepared when they apply for federal help with broadband access.
From the Capitol, it is always my greatest honor and most sincere privilege to serve you as your state Senator. This is Keith Ingram.