ASEA opposes bill that would require state expenditures cap

Currently Arkansas is held in high regard across the country for its conservative spending efforts. Under the Revenue Stabilization Law (Act 311 of 1945) the State of Arkansas is required to designate budget funding to be prioritized (by the Governor and the legislature) into categories A, B and C.

  • Category A includes education, correction, public health and human services
  • Category B includes cost of living adjustments for state employees and agency programs
  • Category C includes new programs requested by agencies and the legislature

Funding goes to category A, then B and lastly C. If cuts are made then those cuts from category C, B and then A.

House Bill 1041, sponsored by Republican Bruce Westerman of District 22, would cap general revenue spending each year. The bill, sponsored by 46 representatives and six senators, states that “the Director of the Department of Finance shall see that the funds on hand and estimated to become available to each state agency are sufficient to maintain the state and all state agencies on a sound financial basis without incurring a deficit.” The bill goes on to state that ”the general revenue expenditures for each fiscal year do not exceed three percent over the total general revenue expenditures of all state agencies and institutions of higher educations for the previous fiscal year.

As quoted in Arkansas News, Governor Beebe called the bill “awful.” I think it has the potential to wreak havoc with the best budget system in the county. I don’t think you throw away 60-some years of the best budget system,” he said.

An additional concern is that HB 1041 takes power from the legislature and places it in the hands of the Department of Finance and Administration (DFA) which as stated by DFA Director Richard Weiss is a violation of the constitutional doctrine of separation of powers.

A.S.E.A. is concerned that when setting categories, important programs in the areas of education, correction, public health, human services as well as cost-of-living adjustments for state employees would be affected.

“A.S.E.A. has always supported and will continue to support efficient state government,” said A.S.E.A. Executive Director Danny James. “With that being said the present budget system in place has served the State of Arkansas well. Also keeping in mind A.S.E.A. constituents, under this proposed legislation the possibility of funding a COLA would be highly unlikely for State Employees who deserve a cost-of-living increase.”

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