What is the balanced budget for? Is it the entire state budget?
Governor Mike Beebe submitted a balanced budget for the State general revenue. This budget addresses our needs, moves our State forward toward a standard of excellence in education, and begins meaningful tax relief in Arkansas.
This recommendation is only for the operating budgets of State agencies receiving State general revenue. It does not include recommendations for federal funds, special revenues, cash funds, or other funds, and it does not address the accumulated one-time surplus money.
What does the Governor's proposed budget do for K-12 Education?
The budget Governor Beebe proposed solidifies education as the top priority of the State and provides additional resources to move Arkansas schools forward, beyond court-and-constitutional mandates.
This budget provides resources to address the mandate of the Supreme Court for adequacy under the foundation funding formula for schools and takes the State's education system beyond adequacy and toward excellence with a significant increase in our pre-K programs and other K-12 programs.
What does the Beebe budget do to address teacher salaries and pre-kindergarten education?
This budget continues the unprecedented increase in funding for education begun in 2003 and not only provides increases in teacher salaries, but dramatically increases funding of the Arkansas Better Chance Program for pre-K children.
"With this recommendation, school districts will have resources necessary to produce high school graduates ready for higher education or the highly skilled jobs that will be the future of our economy.
What does this budget do for educational facilities and transportation?
After using one-time funds to support the Division of Educational Facilities and Transportation, this budget will provide a stable and continuing source of general revenue to support the administrative component necessary for the facility and for the transportation needs of our schools.
Does the Beebe budget address Medicaid and Human Services?
Yes. With growth rates in the State's Medicaid Program easing, this budget takes the opportunity to utilize the Medicaid Trust Fund, which was specifically established for this purpose, to insure critical medical services for our elderly and low-income citizens, and especially for poor children all across the State who deserve a healthy start in life
Other needs in the State's Human Services system will receive new funds to address such programs as foster care and residential services for our at-risk youth, treatment programs for our disabled adolescents, and a new 16-bed, in-patient, dually-diagnosed treatment unit at the State Hospital.
What does Beebe's budget do to address prisons and the probation system?
In order to maintain our prison system and to protect the citizens of this State in as efficient manner as possible, while working to meet the continued growth in prison populations, this budget provides the necessary medical contracts and administrative needs over the next biennium (two years).
The budget also provides for the opening of an additional two-hundred women's beds in the system and the phase-in of the long-planned Special Needs Unit in Malvern. These additions will increase the capacity of the system by more than 1,000 beds by the end of the biennium.
On the community corrections and parole side of the system, this budget will provide the funds necessary to add 60 new probation officers to significantly lower case loads and to increase the potential for successfully returning inmates to productive lives.
Additionally, funds are included to insure continued success in our drug courts and substance-abuse programs. It will allow us to proceed with opening a new unit in Northwest Arkansas and begin a transitional housing program for inmates returning to the "free world."
Does this budget follow through on Governor Beebe's promise to offer need-based scholarships?
The Governor's budget recommendations include using existing balances in the Higher Education Grants Fund to initiate a $1,000 college-scholarship program for high school graduates coming from low-income families. These additional students can be added to grant-and-scholarship programs without having to increase the general revenue budget.
Is the State Employees' Payplan addressed in Beebe's budget?
Thousands of hard-working state employees provide a multitude of services to our citizens each day. This budget will provide a two-percent cost-of-living allowance for State employees each year of the biennium and will also provide rewards for performance to recognize extraordinary efforts by our best employees.
Beebe also proposed increasing payments under the Career Services Recognition Program to enhance retention of well trained and dedicated State employees.
Does Governor Beebe's budget proposal include increased support for higher education in Arkansas?
Yes, Beebe proposed increasing state funding for our colleges and universities. The Governor included an overall 10-percent increase in funding each year of the biennium for the institutions of higher education, including a two-percent cost-of-living allowance for classified and unclassified positions. This continues the necessary investment in higher education our State needs to remain competitive in the world economy. This funding is 2.5 percent above the overall State budget increase. This recommendation also follows the college-model funding formula adopted to address funding equity among all the schools.
In this budget, does Governor Beebe follow through on his pledge to phase out the grocery tax?
Yes, Beebe's proposals include cutting the state grocery tax in half, a strong step forward in phasing out the tax. Given the substantial surplus and a forecast of continued revenue growth, Beebe believes that we can provide all of these services to the citizens of the State and also provide meaningful tax relief.
The state tax on groceries is our State's most regressive tax, taxing Arkansas families on the very basics of life. We must eliminate this tax responsibly, with a phase-out. The Beebe budget includes an allocation of stabilized general revenue totaling $90.6 million in fiscal year 2008 and $83.6 million in fiscal year 2009 to begin the phase-out of the food tax. This will allow immediate reduction in the State sales tax on food by half, from 6 percent to 3 percent.
What other personal tax relief is offered in the Beebe budget?
Governor Beebe also proposed increasing the $300 Homestead Property Tax Credit to $350. This credit has not been increased since it was originally passed and can be financed from the special fund that was established for the credit.
Does the Beebe budget offer any tax relief aimed at keeping or recruiting manufacturers for Arkansas?
Yes, Governor Beebe's budget proposal provides for a partial exemption of sales tax on gas and electricity consumption for manufacturers. Reducing their tax rate from 6 percent to 5 percent is the first step in eliminating the tax on utilities for manufacturers, which will help to make Arkansas more competitive with its sister states in attracting and retaining manufacturers.
Does the Beebe budget offer any tax relief geared specifically for Arkansas farmers?
Yes, the budget also provides tax relief to farmers who have seen significant increases in their cost of doing business as their fuel costs skyrocketed and the sales tax on fuel increased proportionally. Beebe proposed replacing the sales tax on farm fuel with a gallonage tax to prevent such dramatic increases in the future. The rate of the fuel tax would be the equivalent of the sales tax farmers were paying on fuel before the recent dramatic increases.
