Governor Asa Hutchinson presented his balanced budget for the next biennium to the Joint Budget Committee of the General Assembly on Wednesday.
In his remarks, Governor Hutchinson emphasized the importance of creating state savings. The state has already achieved savings during the Governor’s administration through the historic Long Term Reserve Fund. The balance in the Long Term Reserve Fund has increased by almost 50 percent in the past four years and now stands at more than $150 million, as illustrated HERE.
The Governor also underscored his goal to significantly increase the Long Term Reserve Fund balance within the next three years.
A key aspect of the Governor’s budget for the next biennium includes his commitment to request no increase in funding for the implementation of state government transformation. The Governor’s initiative to streamline state government has resulted in savings, efficiencies, and improved management within state government. The budget reflects $10 million in savings from the first year of transformation. This $10 million is just a portion of the overall savings created from the first year of transformation.
The Governor’s budget reflects an increase in state spending by 1.5%, the lowest rate of growth in general revenue spending since the Great Recession, as illustrated HERE. Under the Governor’s leadership, the rate of growth in state spending has steadily declined, from 3.1% in FY18 to 1.5% in FY21.
The Governor also emphasized his commitment to public safety by recommending the state increase the amount of reimbursement it pays to counties that house state inmates from $30 per day to $32 per day. His budget also includes $2.5 million to support Crisis Stabilization Units, $1 million to establish a new state trooper school, and $2.6 million to add 175 beds in the Texarkana and West Memphis community correction facilities.
In addition to savings and public safety, the Governor’s budget underscored specific education reforms including an increase in funding for K-12 education, $3 million in one-time funding for Succeed Scholarships, and continued funding for the Higher Education Productivity Funding Model.
Governor Hutchinson issued this statement during his presentation:
“Our budget should plan for a future that is unpredictable and in which we compete for jobs, capital, and talent. There is good news in our current position. We not only have a balanced budget, but a consistent surplus where our revenues exceed our spending. We are building a savings account that is our first in history and the balance in savings is growing each month.
“Wage rates are up; taxes are down; and we are at the lowest level of SNAP benefits compared to any time in the last 15 years. There are almost 50,000 fewer Medicaid recipients now than there were three years ago. Since 2015, we have enacted $250 million in annual income tax cuts. Over 10 years, this will be $2.5 billion in income tax relief.
“My proposed budget is in line with the biennium recommendation of the General Assembly, but it does reflect the savings from transformation. The budget also accommodates the specific needs of jail overcrowding, public safety, and education. Very importantly, the budget provides a surplus with a substantial amount in restricted reserve.”
You can view the Governor’s balanced budget presentation to the legislature HERE.
