Joint Budget Committee - Pre-Fiscal Session Budget Hearings

Before the governor's at presentation we do need to consider our joint budget rules they are the emir of what we had last we're doing the regular session with the exception of striking the a code provisions in with that I'd be happy to take any questions on the changes. I'm. You are not seeing no questions we have any discussions in no discussion all in favor signify by saying aye. Others posed motion carries. And governor of and we'll go ahead and start out or. Passing out the. The proposed budget. We'll give them just a couple minutes get that handed out governor. Sir Chesterfield will let you saying we also need to I think Mr de Mello's having a good day today. All right I think we've got everything passed out governor welcome joint budget and you're recognized. Thank you Mr chairman and it is good to be with the members of the General Assembly a joint budget today I'm joined up by secretary Larry wall ther and budget director Robert wrecked will present more details on the budget and take your questions after I make of this brief presentation today before I present the budget let me speak to the Makran variant that is currently threatening the education of our children the supply of critical goods and our health care system. First thank you for answering the call time and again for providing needed and timely resources to fight this pandemic. Yesterday I ask the American rescue plan acts steering committee to support $50000000 in new funding to allow our hospital partners the resources needed to staff an additional 265 COVID beds your favorable review of this request is urgently needed and will assure our Kansans that if they get sick whether it's COVID or not there will be medical medical care available to them we have also received and it was announced yesterday 211000 rapid test that will be sent to our communities for pick up free of charge this is a state initiative and I'm pleased to say that last night we received additional 393000 of those test that will be distributed in like fashion this will supplement the current supply of PCR test and the rapid tests that are available through local retail stores it will hopefully ease the burden on our hospitals what you're experiencing staff shortages including the COVID testing clinics in addition. We may need to take emergency steps to keep our schools open I consider our teachers and staff critical workers and we have to keep our schools open for our students. This is an unusual budget presentation because this year we have our general revenues and we have new federal dollars under the American rescue plan and infrastructure funds available for investment this year. When we look at our budget for 2023 and the opportunities for long term investments we must include in the planning both are general revenue budget along with our plan for spending the federal dollars the goals of my administration for Arkansas is best described as wins for 2022 this year we can help our employers by increasing the training of our workforce of course this makes a difference to the lives of our cans is by giving them greater opportunity to support their families and improve their lives. Next we have a mutual goal of expanding our infrastructure from bart broadband expansion in our rule areas to invest in major irrigation projects in Eastern Arkansas that will reduce our dependence upon groundwater and it will help protect our precious flooded timber lands I look forward to working with you to invest our arpa and infrastructure dollars in critical water projects across this state as well as other needs. Then it is about economic growth and particularly an emphasis on creating new economy jobs for advanced manufacturing the high paying technology jobs a good example is to support the General Assembly approved in this last session special session to incentivize the expansion of the steel industry in Eastern Arkansas we are competing with other states would you have put us in the driver's seat to win this competition and the state thank you this means hundreds of high paying jobs in a $3000000000 investment if we are successful. we do for tradition I'm not talk about the same amount of money that we're trying to support them as well first buildings so they can keep growing because we keep making sure they have buildings is that philosophically we're we're where we're going with this yes this is a state as provided funding for public school buildings yes I think this is for buildings for charter schools that's correct all right then thank you. Thank you senator Chesterfield you're recognized for a question yes thank you Mr chairman thank you so much gentleman for being here and again Happy Birthday to my friend 3. A I am concerned because you can't believe everything you read in the paper but I do read the paper a it says that we ask in adequacy we needed some $80000000 for adequacy for public education but we're funding it at a level about 60 9000000 please explain to me why I think the difference when you look at what was in the paper they were looking at the at the base there was a group that was agreed to that was presented in the fall of the or the fall of 2020 so if you look at the increase of educational funding over the 2020 of a proposed budget it's actually 100 and $3000000 so a part of that was that was built in in FY 22 and 60 $9000000 more in a 423 so what the paper was looking at was at baseline so recognized both that thank you 1 follow up. Bite my tongue kissing up could you please tell me when we are audited these programs and we continue to increase like the succeed scholarship has there been an audit of those funds and how they have been used. I'm not by my office I'm not sure. So we don't know where the money's been spent prudently on or not but we continue to increase the amount of funding. I'm just of with the office of budget to you agree to give the money and we try to make sure that they spend that appropriately and that they don't overspend but whether or not you've never seen right of their standing no ma'am hi thank you. Thank you representative Cavenaugh. Thank you Mr I'm over here to the right of my question is going to be talking about inflation so in our presumptions for revenue and also expenditures how have we accounted for this record high inflation that we're experiencing and that that we now believe that we will continue to experience for sometime. Us we are including inflation in our factors the the the overall economic factors because you know we just revise the forecast in on the server the sixteenth I believe we believe it'll continue for the next 2 years and I think and then we'll be of lessening after that so but this is the period that we're looking at today excuse me. We have inflation included in there. A follow up Mister chair. What is that right of inflation that you're factoring in I don't know the rate of inflation I can get that give it a give it to you if you could appreciate that as well thank you. I think I think that's gonna be on page 13 in the balanced budget report the. At the bottom. So and quit according to Kevin because he's lost more than I and that's the 6.3 percent US GDP nominal there is that the rate of inflation I think you're looking for. The top of the final. Chart there. Okay. All right thank you I'm now we're back to not sure who's where C. 18 you're recognized for a question. That's right thank you Mr chairman my question is do you know the dollar amount that the beginning salary will be for a trooper. They were looking at around 52000 if I'm not mistaken there were in the low forties the whole I'm going off memory I think it's around 41000 and I think they're they're looking at raising them to around 52000 who if we rank second whose for taxes what's that I'm not sure what their salary is but just taxes was the one state that would be above thank you senator hatch of 100000. I have no idea what taxes might be misinformation of gun so we need to be careful about using original numbers we need to look at our church. Well I think they're doing the job they're doing and we need to compensate them for that money and we got a what's the top or relative to what we're paying the lower part because they're the ones that are out there putting their lives on the line every day and $52000 a year your life fourth 2000 a year I think people going to law enforcement for the local law enforcement and not necessarily the money but they are they have seen a sharp decrease in the amount of applicants for trooper school and so I think that's why they wanted to raise those and I I think other states they've indicated other states are looking at raising their salaries as well so what you're saying we may be behind even if we're given a $10000 annual in a group we we may be behind and I think that's part of any potential PAYPLAN of changes in the future the how how do we handle a law enforcement salaries and other salaries but I think I think this is a step to try to make sure that we can keep pace they are worried that other regional states are also going up and that we may have to do something in the future but the service will at least give us and and at the proper pace now well I commend them and you for and the governor for the recognition of the fact but we don't need to stop here thank you Mr chairman. Thank you representative of C. 61. Thank you Mr a I want to hit on the state police subject matter again does does our current pastrnak sure and maybe this is gonna be for the department more than free all limit our ability to compensate the troopers appropriately when do we need to revisit that pastrnak sure. I believe there are ways within the current pay structure to do what the state police would like to do now I do think that in the future as as the state looks at a new pay plan that they'll want to separate a law enforcement officers as we've done with medical of people perhaps there are some some professions that are separate from the other grades and I think that's where of law enforcement I would like to be state police is mentioned that the Department corrections mention that and so I think in the future there probably needs to be a law enforcement paid a grid of the right now they can make these changes within the within the current grid they just may have to ask for those increases within those ranges okay and if you discussion for the future but I agree that I don't wanna be picking winners and losers but at the same time if we don't have safety when I have nothing the second question is going to be can you tell me in the budget I was trying to find it was F. there was a rather lengthy meeting yesterday afternoon in judiciary and county jail reimbursement was a big subject building a new jail was a new subject is there anything in the budget that accounts for an additional increase to the county jail for reimbursement taking care of the pressures. Nothing as a as far as a per dollar amount of the I think that's going to stay the same unless it changes from what I understand they're about 2200 prisoners right now in the county jails that were painful or so every dollar increase would be $2200 per day I think they are looking at that trying to determine if that's if that needs to happen but if you if you look in it's going to be reflected in the in the ballot in the in the budget manuals of those line items have been transferred because you've got some department of correction prisoners in county jails and you got some community corrections in the in the county jails and so that'll be reflected in the budget books are then the last question was the governor may statement while go about some of the higher ed institutions have been underfunded historically and I'm I'm just trying to make sure I interpret the sheet that's in front of us correctly it seems that we may have taken some money away from some and redirected it to others in my interpreting that correctly or my not looking at it right now well it hasn't been redirected what is happened was is with the productivity funding and those formulas for productivity some institutions did lose money because of the productivity of funding formulas and some didn't get more money and so the real and that's really not tied to the 3 institutions that it was determined in the past of those 3 institutions were under funded historically there was an agreement that over 4 year period there funding would be increased what the governor wanted to do now since we do have some extra funding these increase those last 3 payments of this year so they don't have to wait for years to get to back to a level funding where they flee the should be and so what what what's reflected in this is productivity findings what you're saying. So none of none of the institutions of higher ed that underperformed are getting increases in reality there are these red numbers indicate that are those the ones that under performed and that's why they're losing their funding the that's correct in in the in the case of the southern Arkansas university their productivity funding did go down the because we're making enough for their historically of. Low the. Funds from the state actually seen an increase they would have shown they would have shown a decrease that have been for the acceleration of the of of the state funds even though other under performing that's correct thank you. And on that note if we could just kinda get some background on how we determine that they were under funded you know what what that was based on in general was a based on number of students number graduates number what exactly I think the chairman jeans had a question. Thank you Mr chairman. I'm on the second page of your balanced budget under a state agencies. The performers Fund which we didn't put anything in it last. Session and we're asking for 16000000 I've asked a half. Looks like we've got a 73.$6000000 balance. We started this thing out and I'm my memory is not but it was 1520 0 somewhere in the neighborhood it's just grown and grown why are we keeping put more money in there or something that we're not using of the reason that that was put in this time is because of the F. 4 at the end of FY 23 to 20 seventh pay period so we do expect that fun to be had pretty hard because of the 20 seventh pay period which only happens I think every 10 years or so and so in June agencies all have the money for the 20 seventh paper that's not budgeted in that that was the reason for the $16000000 increase also coming out of that fund or the merit increases and the increases to unity funding and so that that fund is going to decrease quite a bit I how much is it 20 seventh paper was not all I've I've heard different numbers anywhere from 25 to $30000000 25 to 30000000 for this this will put us up to 90 which will more than adequate to cover that. The. Or. Bills closer to $20000000 for the for the G. R. portion of the 20 seventh pay period okay but we do expect that there's going to be S. excess funds but if you look right now and what is dedicated from that fund of it's it's not I mean we were asked to to look at the additional funding other performance fund for other items is your call there was a an issue with the GS 13 fives for the agencies we really couldn't afford to give that to him and budget. The the thing about the performance fund agencies only get that if they're short of funds so while it looks like a large balance and we may end up with that with a larger balance in what is traditionally there right now it's budget to and in there's not much room left in it but we do expect because agencies will have salary savings that that that performance fund will be healthy at the end of the year we just don't know how much we can't dedicate any additional funds any anymore items okay thank you. One if in and so on and if we go ahead get a break down of I think those funds are going to be spent we'll get that's in thank you. Senator Hill you're recognized for a question. Thank you Mr chair your co chair at my question on that one but I have another question for you all over here to your left the governor looted 2 while ago the water in Eastern Arkansas. Kind of money to talking about for that. I'm sorry I didn't hear the question to the what the water yet the governor's mansion while ago in Eastern Arkansas Water programs water plans what what is it what are you talking about on that dollar wise and where the funding from because I don't see that on here anywhere. Yeah a little clarification in an I think this is another all we needed was just a look the governor outlined a few one time items and and they're not in you know any of the reports which are to kind of track down what he was talking about exactly I'm sure that's what you're alluding to yes that's one to also the funding for the water programs there I don't think that's part of the of the the budget of the RSA I'm not mistaken they're looking at getting some federal funds to to do some of those initiatives I don't think that's part of our part of this part of A. R. P. as part of the the other the infrastructure and so we'll be using those types of funds to finance projects over in Eastern Arkansas and round the state having to do with the water and wastewater things like that no that that water wastewater or as an actual groundwater what we're referring to. I can't tell you specifically we've had several requests actually with that was a task force that was put together last year of that identified a significant number of projects that would it was the ask was significantly higher than the amount of money that we have available from the sources so our secretary Wes ward will be analyzing those to determine which ones will move forward with so I can't really tell you because we don't have the the final last on that at this point in time thank you Sir I think it is the projects you're thinking is referring to though but if we could go ahead and get a list of what the governor had proposed earlier in one time dollars whether it be a R. P. or the infrastructure whatever made in it that's kind of how we kick things off before we got into is balanced budget with discussing some of those one time items to make that may help clear up a little bit confusion representative Boyd. Senator Hill you good I'm good. Representative Meeks you're recognized thank you Mr and and basically my questions is kind of a follow up how much do we have left of the code funds in the you know the instruct how much that one time money do we have available to you now. With regard to cares we're we have. Allocated and are spending the entire amount of that select just a few dollars and some change with regard to the first amount of money that we received from the a a RP we received half of it 700. 7 $780000000 we have about 50 of should be 60000000 left on of designated at this point we actually had a a RP. Steering committee yesterday where we allocated 50000002 part of health or to support the bids that we need with the search is going on at this point in time so will in probably July of this year will get the other $780000000 and they will be dealing with the distribution based on the request that we have. Okay and then the infrastructure program how is that going to come. The infrastructure is a little more complicated we'll be doing as I understand it at this point I will be requesting specific projects that will go back to Washington DC for approval up until now it's been we we we get the money we determine if they're eligible and we moved for we don't have to report back to the to the Washington to the Department treasury but going forward with regard to some of these projects will have to do that so that's where we are we haven't actually determined any that we will we just. We just submitted our application of the end of the 2021 and I don't think we've had a response from that yet from the federal government I thank you thanks to our. Thank you. C. 12. Thank you senator and. Thanks secretary Walter being here with your staff and I applaud the governor for his specially his special comments on support for the Arkansas state police but I guess really have a question what's more of a comment that when I I hear people so often mentioned that the our state troopers are doing this because of what's in their heart we got there's gonna be a paradigm shift from that. What's in your heart can't paper kids go to college you can't pay a mortgage what brings them to the professional is desire for public service but they need to be fairly compensated with it so it really gets under my skin we start talking about the it's for the for the love or the passion of the profession and that is not no surgery when the number one priority of government as public safety in the state of Arkansas is contributing $0.2 of every taxpayer's dollars towards public safety we've got a there's got to be a change and attitudes and in what we're doing for the law enforcement community and public safety so anything that you can do to help that along it would be greatly appreciated not only by myself my constituents in the entire state of Arkansas thank you thank you Mr. And and I would say I meant no offense but why my comment the I'm a veteran I when the military and I did go in the military from my love of country had nothing to do with the $400 a month they paid me so I didn't meant no offense but that's where that came. I thank you Senator Irvin you're recognized for a question. Thank you for your service Mr brakkton. And I'm over here hi. And could you just at I was very very happy to hear that digital funding for the child addiction recovery at teams that current legislation was of a very important ones that I worked on with former representative Rebecca Petty. And. Do you know where is that going to be at what where's that money going through the criminal justice institute okay and then also and the crime victims reparation funds. It's also going to CJ I or is that going through state. It's a miscellaneous agency fund but it okay this is the first time I think or leases in recent times if they've always use different funding this is actually general revenue for the first time to make sure that they have adequate or at least the resources to compensate some crime victims. Right and and sometimes I know that we have written in legislation at for instance and the legislation on human trafficking you know we have the directive in those that legislation that we passed in order to find these the separation victim funds but so often it's not collected or it's not assessed is that may be one of the reasons why this fund has been diminishing as are we not communicating enough with you know our judges or prosecutors as far as really making sure that. This compact and reparation Fund is fully funded or that they're able to go after you know those types of fines that are in the legislation they're just not being assess or not being collected there seems to be a communication gap is what I'm trying to say is that an issue I'm really not certain what the issue is or I know even with COVID there was a decline in revenues or the courts and I don't know if that had something to do with that as well I have to check and see what the what the reasons for the decline in funding yeah well I mean that and I appreciate that we are supplementing and in making sure that that funding is there I think that's a good thing but I think that we also need to work with our judicial branch to make sure that they understand this is important to us if we pass this in our legislation that you know these criminals need to be. The ones funding that particularly those that are trafficking our children and our citizens that is a money making industry and there's no reason in the world why we shouldn't be prosecuting those people and making sure that they pay for their crimes not just behind bars but also monetarily so that these victims can get paid to so I think there's a disconnect there and I know we've talked about it on our children and youth and families task force that I'm on with the Supreme Court commission but we've got to get more engagement out there I appreciate the fact that we're funding this but I think we also need to make sure they stepped up to and do their part. Thank you. All right I think we've got one more question Senator Hammer Blake thank you Mr and Senator Hester may hit on this committee going I just didn't get the answer the Economic Development Commission. Is getting a 38 percent increase what is that what are those dollars can be used for the majority of those 5.$8000000 for accelerated acceleration programs I'm and I'm not exactly sure what they do with their funds but I think but then that's the majority of that of that increase is there is there fund that has a balance in that now or use that allowed to accumulate you know I don't know if that has a balanced attack identifying the. 2. Well we got 22 right. What what lawyers plan that they they got the same amount one time funding in 22 this is just putting in the budget to go forward with this again I don't know what the balance might be or what or what they do with those funds all right so this gonna be a permanent placement of one time money that's going to carry forward indefinitely let's we come back change in the future right that's correct and do we know how that do we know how that fund has performed as far as what it was originally set up to she even to accomplish is there anything that you can point to and say this is what we got for the money. I don't know personally I think that's a big question for commerce. Okay all right thank you Mr. I thank you representative these recognized for a question. I'm good you're good okay. All right members and I think that's all the questions we have a really appreciate your time and presentations morning with that we're going to be back here 1:00 take up higher education to make sure look over your notes there hopefully will also work I quickly in that afternoon meeting. Charity and any other business staff all right members were adjourned till 1:00 this afternoon thank you for your time this morning.