Some legislators were expecting to go over two budgets today: one assuming the continuation of the Medicaid expansion (what Governor Hutchinson is calling “Arkansas Works”) and a separate plan if that program falls through. They only got the first one that includes the expansion (yet still lacks the funds needed to make basic cost of living adjustments). Without expanding Medicaid, we would hemorrhage $100 million additional dollars out of the budget on top of the $242 million in tax cuts over the past two sessions. Perhaps that alternate budget was too wretched to print.It's interesting to compare the budget picture in Arkansas — somewhat leaner times, stagnating outlays — with the outright fiscal catastrophe unfolding to the south, where Louisiana is reeling from years of indiscriminate budget slashing from Republican Gov. Bobby Jindal. The budget picture there would be disastrous regardless, but it's worsened by the fact that Jindal, like almost every other Southern governor, rejected the Medicaid expansion.
The anticipated surplus for fiscal year 2016 is a modest $35.9 million. That is fine this year, but could be disastrous in 2018. If we end up with a surplus that small two years from now, the governor’s highway funding plan (which depends on surplus funds starting in 2018) will have few options left. We won’t be able to start guessing at what the 2018 surplus will be until after that fiscal year starts, but historically they have ranged wildly from hundreds of millions to zero dollars. If we have a few lean years, that will knock a big hole in the highway plan, and there isn’t much room left for increased “efficiency” in public programs which have already been squeezed within an inch of their lives.
Currently, the crux of the plan uses surplus funds instead of directly taking money from general revenue (which could further devastate public programs like schools and parks). However, general revenue from a surplus and general revenue from the normal budgeting process is really all the same pot of tax dollars.
On the topic of funding highways with surpluses instead of giving it a column in the regular budget like everything else, Representative Payton asked “I mean, isn’t that essentially what column B and C [of the normal budget] does?” Yes. Waiting to spend general revenue until after it has magically transformed into surplus money doesn’t change the fact that you are taking general revenue from where it should be spent (pre-K, juvenile justice, etc.) and using it for highways – it just sounds better.