Beebe defends budget | Arkansas Blog

Beebe defends budget


Gov. Mike Beebe's weekly column/radio talk explains and defends his budget proposal.

LITTLE ROCK - This week, I submitted a balanced-budget proposal to the joint houses of the General Assembly, in preparation for the upcoming legislative session. Arkansas is known for its history of fiscal restraint, as our Constitution prohibits deficit spending and requires the State budget to be balanced. My budget recommendations reflect this spirit in their conservative approach - an approach I believe is especially necessary in the face of the ongoing financial crisis and an uncertain economic outlook.

The proposed budget also reflects a priority that will never change, no matter the times - and that's its emphasis on education. Providing our young people with excellence in education will always remain my top priority when budget decisions are considered. It's not just a Constitutional mandate, it's a moral imperative. To that end, this budget provides full funding for our educational needs, above and beyond court-mandated adequacy levels, because it illustrates my commitment to ensuring that every child in our State has the opportunity to gain an education of the highest order.

Providing meaningful tax relief to working families of our State is another essential feature of this budget proposal - it's a promise I made to the people of Arkansas, and one I intend to keep. In 2007, we enacted the largest tax reduction in Arkansas history by cutting the grocery tax in half; but I promised it would not end there. I've asked the Legislature to cut the grocery tax an additional 1 percent this year. While economic times are tight and tough decisions will have to be made with regards to spending, I believe the greater harm would be to go back on my word to the people of Arkansas. Middle-class, working families are the heart of our State and of our economy, and they deserve this help.

Unfortunately, we must also exercise caution in the face of the current economic climate and remain alert to potential further trouble. When we began budget forecasting in mid-summer, we were optimistic that we could restore cuts previously made in the 2009 forecast, and target growth in some critical areas of need. But in mid-October, the unprecedented crisis struck our financial markets and has since spread throughout the global economy. Our original expectations had to be dramatically revised, and our budget recommendations reduced to match new revenue predictions.

Accordingly, while our base budget for state government will be fulfilled as always, we've reduced our forecast for new general revenue funding by nearly 50 percent. However, we've also taken a step that hasn't been seen in usual budget recommendations, by asking the Legislature to go ahead and appropriate the money represented by these reductions. That way, if the economy stabilizes and revenues grow, this restored funding will already be in place, and ensured to flow where it is critically needed.

Finally, I've recommended that a "rainy-day fund" be created with surplus funds, so that I can work with the Legislature to target critical needs that may arise during this time of fiscal uncertainty - especially in areas such as Medicaid assistance and other essential services, such as the Department of Correction and the Arkansas State Police. This provisional funding would only go to fill gaps in critical areas like those I just mentioned; if it turns out unnecessary, it would revert to the General Improvement Fund, as always. I believe such a provision will allow the State to remain proactive and responsive to our most critical needs, no matter the national and global economic conditions.

A responsible balanced budget has both the most pressing needs and the future progress of Arkansas at heart. The recommendations I have proposed contain both of those interests at their core, and I look forward to working with the Legislature in the upcoming session to meet our obligation to the people of Arkansas.


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