LITTLE ROCK, Ark. (AP) - Arkansas Gov. Asa Hutchinson on Friday announced a $70 million state budget cut to offset a revenue shortfall for the fiscal year that ends in June.
Hutchinson said spending cuts in the state’s $5.2 billion budget would affect some agencies that receive category B funding under the Revenue Stabilization Act, such as the departments of education, human services, correction and economic development.
The Arkansas Department of Finance and Administration said the agencies will see cuts in funding for programs and projects not deemed essential or necessary. Hutchinson said the agencies also would be able to absorb the cuts because of savings generated in the past year.
The shortfall is “a miss on revenue, and not a miss on spending,” the governor said.
Hutchinson said there won’t be any disruptions in services and no reductions in jobs. He also said there would be no reductions in payroll or payments for providers.
“Controlling spending is what allows us to fully fund the services even though the revenue is below forecast by $70 million,” Hutchinson said.
Despite the shortfall, Hutchinson said the state’s economy is “on track and has momentum.”
The governor also wants to ask lawmakers to strengthen the state’s reserve fund. Hutchinson said having a strong long-term reserve fund will help the state’s bond rating.
“One of the marks against us is the fact that we have not had a robust long-term reserve fund,” he said.
Lawmakers will be asked during a special legislative session to move money from the Arkansas Healthy Century Trust Fund, which was created out of tobacco settlement money and is accruing interest, to the reserve fund to help with the bond rating, but also meet unexpected needs.
Please read our comment policy before commenting.