Thread by @ForARPeople1

Good morning Arkansas!

Long time no see.

We're posted up in the Joint Budget Committee for the pre-fiscal session budget meetings. This is where the bulk of the work of fiscal session gets done.

Sen. Dismang opens the meeting with a reminder that no action will be taken today, but this lets legislators consider and debate what the numbers are and will be .

Sec. of DFA Hudson says the Gov's letter emphasizes three priorities:

1) holding down government growth

2) continuing to invest in education

3) continuing to cut income taxes on the path to 0 income tax.

They're adding 122 million to the LEARNS voucher scam lol. We've been warning y'all for ages! Another 70 million in a one-time set aside also for vouchers.

54 million to Corrections, Ag, etc. to account for the pay plan increase that was passed last year.

Adding 6 million to the Gov's 1033 initiative (government partnering with faith-based nonprofits to get Arkansans off welfare)

(Because I know someone is wondering, yes, Rep. David Whitaker is again rocking an excellent shirt)

Adding several million to the Office of Inspector General to help reduce SNAP error rate.

100 million to Medicaid trust fund.

Reintroducing category A and B funding. A is about 93% of funding. These are recurring monthly expenses. B is one-time expenses that can be prioritized when the budget allows. Hudson says this will help with the tax cut plans.

Rep. Rye up with the first question. Asks how much an income tax cut will cost.

Hudson: for about a tenth of a percent of a reduction, it's about 58 million in lost revenue.

Rep. Wooten notes that public education wasn't mentioned in the Sec's remarks. Public schools aren't getting any new money in this year's Revenue Stabilization Act (RSA for short). Wooten says we can't live off the reserves forever.

Sen. Davis wants to know the per-pupil increase for schools. She claims we're spending more per pupil than we ever have before.

Sen. Hickey: concerned about the Medicaid trust fund. Clarifies that this is an additional 100 million to Medicaid, so the total is about 200 mil. Hudson doesn't expect any more money in FY26 to Medicaid, but does expect FY27 to get some of that money.

Hickey wants to be sure we're not holding anything over to make the numbers look better. Doesn't want a sudden increase once the FY turns over. We're talking close to half a billion total in Medicaid spending.

Hudson clarifies for Rep. Collins that the extra 70 million to EFAs is a contingency. They don't know what the numbers will be for sure. This is a one-time use fund. The new numbers will be built into FY28's budget.

EFAs in FY27 around 300 million, sounds like. Goodness gracious.

Sec. Hudson clarifies for Sen. Tucker that we have 309 million in the budget for EFAs, plus this 70 million as a contingency.

Sen. Irvin: is there a correlation between cutting income taxes, putting more money into people's pockets, and increased revenue? Where is this income coming from?

Hudson indicates that it's sales tax.

Rep. Rye again: the federal situation means we'll have to come up with more money in the future for Medicaid. Where's that coming from?

Hudson: Federal reimbursement rate actually going up this fall.

(Also worth noting that the new faces from special elections are already present - Brad Simon of SD26 and Alex Holladay of HD70 both here)

Ark Division of Higher Education up next.

Overall, higher ed is 2.61% more productive than last year. Concurrent credit programs were particularly successful, as well as technical ed programs.

Sen. Tucker: UA LR is getting 1.5 mil less than last year. Why?

A: Recommendation based on overall productivity. Down in productivity (5% ish) means less money. (Very backwards way of doing things)

Rep. Richmond asks for bigger text in these reports, much to everyone's delight.

Rep. McCullough asks for clarification on this productivity formula. The formula measures certificates and degrees that institutions produce (points awarded for certain other things).

Rep. Wooten: are we calculating the potential cost of the Iran war/a possible economic slump in any of this?

Not really, seems to be the answer.

Rep. Richardson wants clarification on this funding formula - what are these extra multipliers and how do they work?

The law states that degrees achieved by underserved populations and in high demand fields are worth more points

Rep. Collins: ACCESS Act says we need to revisit this formula. What's the composition of the group running the study?

A: lots of chancellors/presidents of institutions, independent scholars, some consultants.

Collins notes that there are a lot of UA institutions across the state, with a lot of different needs. Needs more representation in determining the efficacy of this funding formula.

(Ron Caldwell and Bryan King looking pretty happy this morning, getting some handshakes and hugs from other prison opponents. They both survived primary challenges by Gov-backed candidates pretty handily last night).

Rep. McCullough: how do we divide funding between 4/2 year institutions?

A: there's an adjustment made to point totals in this funding formula related to that.

Rep Wooten: U of A Fay adding $14 mil to the athletic funding. Where's that in here?

Athletic funding not in this

Rep Garner: several institutions have at least 50% increases. What gives?

Some errors in last year's FY projections; new constructions, new programs etc. (School of Math and Sciences, South Ark College, SAU Tech). SAC will be training lithium extractors, apparently.

SAU Tech increase is partly federally funded; they're working in some aerospace defense contracts.

Sen. Tucker wants to also now about ASU Mountain Home and ASU Newport increases. Similar constructions + federal funds, one of which being a program to increase maternal health.

Sen. Flowers wants to know why UA Pine Bluff's 1890 extension program is losing money.

A: Appropriation has been reduced to align with expenditure levels. It won't affect federal matches.

Rep. Wooten asking about a 14 mil increase to the athletics budget.

Came from a board resolution. There's a few different options for how to facilitate a transfer of funds the board requested.

Wooten is worried about how these costs will need to be absorbed by students.

Wooten, it seems, is not on the consistent "this year is our year" train for Arkansas football.

Lawmakers really curious about how the school will cover the cost of this board resolution (sounds like about 6 million). McKenzie trying to get at the same point Wooten was - they don't want these costs to fall on students.

Sen. Hill also worried about costs hitting students. Wants to be sure we're winning in education first, before we start raising prices for athletics.

Sen. Hester wants to know where we rank compared to our competition w/r/t costs. We're in the bottom quartile (which is good in this case).

All of this is related to a NIL settlement. Most other schools in the settlement are either fundraising, raising ticket prices, etc.

(We're still on this question, going around and around in circles pretty much; Dismang a bit annoyed with lawmakers and reminds them nothing will get decided today)

UAPB up to walk Sen. Flowers through her question re the 1890 extension service. Answer is basically the same. The federal match shouldn't change, this is in alignment with UAPB's actual spending.

Rep. Garner asking a question now to clarify university policies about how they deal with protected first amendment speech. It's a not-so-subtle dig at the Emily Suski situation, I'd imagine.

The questions will be answered after the meeting, I think.

Flowers really not letting this 1890 extension decrease go. Div. of Ag has an exclusive budget from UAPB.

Higher ed done! Moving onto Corrections. Dismang asks folks to save discussion of prison funding till the end.

Big thing is a transfer of employees to the Secretary of Corrections office. Sails through, no problem.

Sen. Flowers asks about an increase to medical contracting with corrections. The contract will be up for renewal this Sept. They're anticipating an increase in the contract.

She notes that people often don't get great care in prisons and wants to know how complaints about the system are handled (this is not budget related, though it is an important topic). There are systems in place to address complaints.

Sen. Dees: we hear a ton about not be able to cover county jail reimbursements for housing state inmates. Why is funding flat for this?

A: Invoices have often come late; increase in funding last year helped accelerate that process. DOC is just a pass through for funding.

Rep. Garner: is there a mechanism to ensure WellPath is providing modern care?

A: Yep, 3rd party auditors.

Rep. Wooten: what's the total DOC employment?

4950 positions, with 1500 vacant. Not sure how many of those are over 2 years old.

437 million to 480 million for DoC - not actually an increase, it's a weird side effect of laws passed in 2025. Shuffling some money around.

The law in question is a recidivism reduction program; Sen Tucker wants to know how many positions will be created to run this. Sounds like about 200.

Flowers and Wooten going back and forth with Sec. Wallace on WellPath issues and how the increase in compensation is working; he wants to know specifically how far out these projections go - about 2 years.

Breezing through some other stuff now; pretty standard stuff, no questions from legislators (they also hate long meetings).

And we're done for the day. Public schools, public safety, and health tomorrow!

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