2/19/12

Both Democrats and Republicans have plenty on the line as they kick off the 2012 campaign with the filing deadlines in Arkansas this week.

Democrats are trying to rebound from a 2010 election where they lost control of the state’s congressional delegation, while Republicans are trying to reach a long-sought goal of a majority in the state Legislature.

The playing field for that fight will become clearer on Thursday, as hundreds of candidates for office fill the state Capitol to make their bids official. The one-week filing period for legislative, congressional and presidential candidates begins at noon that day.

With no statewide candidates and a presidential race that has so far ignored Arkansas, much of the focus will be on the four congressional districts and the 135 legislative seats that will be up this year. After the state’s legislative boundaries were redrawn, all 100 state House and 35 state Senate seats will be on the ballot this year.

State Democratic Party Chairman Will Bond said he believes the party is in a strong position to grow its majority in the Legislature, as the party prepares for this year’s election. Democrats hold 54 of 100 seats in the state House and 20 of 35 seats in the state Senate.

After a 2010 election where Republicans made gains in legislative races by tying opponents to President Barack Obama – who remains deeply unpopular in the state – Democrats are eager to shift the focus back to state issues, Bond indicated.

“What we’re talking about in our state races is the qualifications of our candidates,” Bond said. “The Arkansas Democrat brand has an incredible history.”

Democrats say they expect to field candidates in about 70 of 100 House races, with 11 contested primaries expected. In the Senate, they expect to field candidates in 26 of the 35 Senate races, with 11 contested primaries.

Republicans say they expect to compete in 70 House races, with six contested primaries in that chamber. In the Senate, they expect to field candidates in 25 races with five contested primaries there so far.

State Republican Party Chairman Doyle Webb said he believes the party has a realistic shot at winning control of both chambers of the Legislature for the first time since Reconstruction.

“I believe realistically from the mood of the public, from the policies of Barack Obama and some polling and other verifications around that we’ve had around the state we feel that the Arkansas voter is ready to make a dramatic change,” Webb said.

Candidates for the state’s four congressional districts will also be among those lining up to make their bids official this week. Democratic U.S. Rep. Mike Ross’ decision to not seek re-election for his 4th district seat in south Arkansas has raised Republican hopes that they can control all four of the state’s congressional districts.

Four Republicans – John Cowart, Tom Cotton, Beth Ann Rankin and Marcus Richmond – have announced bids for Ross’ seat and Webb said he believes the field is likely settled in that race. Most of the attention has focused on Rankin, who Ross defeated in his 2010 re-election bid, and Cotton, who has led in fundraising among the GOP contenders for the seat.

State Sen. Gene Jeffress and D.C. Morrison, who unsuccessfully ran for the U.S. Senate two years ago, have both said they’re running for the Democratic nomination for Ross’ seat. But neither has reported raising any money for the race.

Ross has said he’s disappointed that more candidates haven’t stepped forward, and Bond said he expected one more Democrat to join the field.

Democrats aim to regain one or both of the two congressional seats they lost in the 2010 election – the 1st in east Arkansas and the 2nd in central Arkansas. State Rep. Clark Hall and Arkansas State University economist Gary Latanich have both announced bids to run for the Democratic nomination to challenge freshman Republican U.S. Rep. Rick Crawford.

Though Democrats have struggled to find a candidate in the 2nd district to challenge freshman Republican U.S. Rep. Tim Griffin, Bond says he expects former state Rep. Jay Martin to enter the race. Martin, who ran unsuccessfully for the Democratic nomination for lieutenant governor in 2006, has said he is preparing for a potential bid but didn’t return a call Friday about the race.

The reliably Republican 3rd district race in northwest Arkansas will likely end up pitting Republican Congressman Steve Womack against Democrat Ken Aden. Neither is expected to face a primary challenger in May.

The filing period may also offer a hint of how much Arkansas will figure into a still-fluid Republican presidential race. Though the Legislature’s decision in 2009 to move the presidential primary back to May initially appeared to keep the state out of play. But the possibility of a drawn-out fight for the GOP nomination means that the state could still play a role in the contest.

Webb said Newt Gingrich, Ron Paul, Mitt Romney and Rick Santorum’s presidential campaigns have all told the state party they intend to file to appear on the ballot in Arkansas.

Arkansas Democrat Gazette

2/14/12

LITTLE ROCK — Gov. Mike Beebe urged lawmakers Monday to do what he said voters intended when they created fiscal sessions: Approve a state budget and go home.

But which budget to approve became an issue when Republican legislators filed resolutions that, if adopted, would allow them to introduce their own versions of the budget, instead of relying on Beebe’s $4.72 billion general-revenue budget recommendation for fiscal 2013.

Monday was the opening day of the 2012 fiscal session, only the second held by the state. Beebe addressed a joint meeting of the House and Senate, saying the first fiscal session, held in 2010, was short and sweet.

“I urge and applaud to take that same route,” he said.

In 2008, voters adopted Amendment 86 authorizing fiscal sessions in even numbered years. Previously, the Legislature met in odd numbered years in “regular” sessions, during which it enacted the state budget for two fiscal years. Now, during a regular session, a budget for only one year is enacted.

A fiscal session is limited to 30 days with one possible extension of no more than 15 days. As of Monday, 294 bills had been introduced.

Beebe did not refer specifically to the resolutions for other budget proposals.

“It is my job to propose and it is your job to dispose. That doesn’t mean you are free from proposing yourself,” Beebe said in his speech to lawmakers. “Sometimes I applaud your initiative and sometimes I wonder where you came up with the idea to begin with.”

Beebe spokesman Matt De-Cample said after the speech that the governor is open to looking at other proposals.

House Republican leader Rep. John Burris of Harrison filed House Concurrent Resolution 1008. Sens. Michael Lamoureux, R-Russellville, and Johnny Key, R-Mountain Home, filed Senate Concurrent Resolution 3.

During a fiscal session, a lawmaker who wants to introduce a nonappropropriation bill is required to get a two thirds vote in the 100-member House and 35-member Senate in order to introduce such a bill.

“I think the governor’s budget is good. Is it perfect? No. So, the question is what room is there for change and how do we have the most input? That’s through potentially having our own competing budget,” Burris said.

The resolutions are not specific about how they would differ from the budget Beebe has proposed to the Budget Committee. Such resolutions typically lack specifics.

Beebe’s budget included a $163 million spending increase, which includes $114 million more for the state’s Medicaid program and $56.6 million more for kindergarten through 12th grade education.

Burris said his budget will propose less spending, but he wouldn’t say where the cuts would happen. He said he would have details by the end of the week.

House Budget Chairman Rep. Kathy Webb, D-Little Rock, said while Burris and other Republicans are welcome to create their own budget proposal, she expects the Legislature will approve a budget based on the governor’s plan.

“Frankly, I’ve looked for cuts and I just don’t see the cuts. I don’t have the specifics on what Rep. Burris is going to propose to cut, but I don’t see the cuts in the budgets,” Webb said. “I just don’t see the money without cutting out the programs that we need, services that we need. I’m very supportive of what the governor has laid out so far, maybe a few minor tweaks but that’s about it.”

House Speaker Robert S. Moore Jr., D-Arkansas City, said while addressing the House that lawmakers shouldn’t try to start from scratch on the budget.

“When the framers of Amendment 86 put it together, they didn’t intend for us to come down and reinvent the budget wheel, but rather to come down here and keep the train on the tracks and keep it moving along,” Moore said. “We don’t want to deal with gridlock, we don’t want to deal with distraction that take us away from the business of the people.”

Burris stressed that he is not trying to cause a problem. He said he just wants more discussion.

“It’s not an attempt to road block or cause problems. It’s actually the exact opposite. This is a way to get to the table and get together early and have some room for improvements,” Burris said. “It’s very good for us to have competing ideas and competing budgets out there. His budget is very good, it is a conservative budget. This is the way that we have debate, competing ideas.”

At a news conference after the House recessed for the day, Moore said he’s willing to look at Burris’ proposal alongside the budget that will be proposed by the Budget Committee.

“I’m looking forward to looking at his proposal and seeing where he thinks he can find some fat that we need to trim out in the budget,” Moore said.

Moore said Burris mentioned money in agency budgets but did not specifically say where excess money was being spent.

Moore said what money could be considered fat is subjective depending on what program is affected.

“If you are not supportive of some of the programs that are in there you think there is some money to be found,” Moore said. “I think the budget is very reflective of our commitments and responsibility to the people of the state.”

He said the governor’s budget reflects the priorities determined by the majority of lawmakers and the governor.

“I think we are on the right track to continue that,” Moore said.

Burris said recent actions by the governor to restore 15 firefighting positions with the state Forestry Commission shows that there is excess money available.

Beebe announced Feb. 8 that $550,000 from the state Department of Agriculture’s budget could be shifted from unused funds the department usually returns to the state at the end of each fiscal year. The money will allow the commission, which is part of the Agriculture Department, to rehire firefighters whose positions had been eliminated in layoffs last month.

“I think that very much underscored our argument. Up to that point we were told there was no money, it had to be tax increases and then magical pots of half a million dollars appear,” Burris said.

But Moore said the $550,000 reallocation for the Forestry Commission should not give lawmakers the impression that there are other pockets of money that should be spent. He said that agencies are normally given a cushion of more money than they are forecasted to spend in case of an emergency.

“Forecasting is not an exact science,” he said. “You don’t try to be precise, you try to give yourself a little cushion.”

Burris said finding money in the budget is a way for the Legislature to start identifying how it will pay for a projected Medicaid shortfall that the state Department of Human Services has estimated as between $200 million and $250 million in fiscal 2014, which begins on July 1, 2013.

“There is a fiscal train wreck coming with Medicaid. We have got to start looking at ways that we can operate efficiently or start talking about tax increases, and I’m not ready to do that. So it is time to start asking these agencies to operate with less,” Burris said.

OTHER ISSUES

Joint Budget Chairman Sen. Gilbert Baker, R-Conway, said the governor’s request for a $114 million general revenue increase for the Medicaid program will be “a big discussion point” for lawmakers about the governor’s proposed $4.7 million budget.

“The governor brought me some information today on how they arrived at that number and I haven’t had a chance to really study it yet,” he said. “It is a large amount of [the Revenue Stabilization Act] and to the degree that you deal with that in some other way through some savings in Medicaid, whatever, then you would free up dollars to do some other things that folks may propose.”

Also on Medicaid, Rep.Bruce Westerman, R-Hot Springs, and eight other Republicans filed HCR 1010 to authorize the introduction of a bill to “improve program integrity for Medicaid and the ARKids First Program by implementing waste, fraud and abuse prevention, detection and recovery programs.”

Moore said he supports HCR 1006 and HCR 1009 both sponsored by Rep. Larry Cowling, D-Foreman, that would repeal a sales-tax exemption that the Legislature enacted in 2011 for truckers. The exemption was OK’d in exchange for the Arkansas Trucking Association’s support for a 5-cents per-gallon diesel tax increase proposed ballot issue. The association withdrew its support for the diesel tax increase.

Despite snowy weather in the morning, 33 of 35 senators and 97 of 100 House members showed up for the session’s first day.

BUDGET

The Budget Committee on Monday recommended a bill that will provide no pay raises to the state’s elected officials. House Bill 1005 by the committee is the General Appropriation Bill, which appropriates funds for the core operations of the executive, legislative and judicial branches of state government.

State government as a whole is much bigger than the core operations this bill would fund – the total budget exceeds $24 billion a year, this bill would appropriate $36.8 million for personal services and operating expenses, $1.825 million to the House for expenses between sessions, and $650,000 to the Senate for expenses between sessions.

But the bill has significance also because the Arkansas Constitution says in Article V, Section 40, that the General Appropriation Bill must be enacted ahead of any other fiscal 2013 appropriation bill.

HB1005 would maintain the salaries of the state’s constitutional offices at existing levels: governor, $86,890; lieutenant governor, $41,896; attorney general, $72,408; secretary of state, and treasurer, auditor and land commissioner, $54,305.

The salaries for the House speaker and Senate president pro tempore would remain at $17,771, while the salaries for the other 133 lawmakers would be $15,869.

The salaries of the state’s chief justice and six other justices would remain at $156,864 and $145,204, respectively, under the bill. The pay of the Court of Appeals’ chief judge and the other appeals judges would stay at $142,969 and $140,732, respectively.

The pay of 121 circuit judges would continue at $136,257 and the salaries for 38 district judges would be $121,816. The bill covers the salaries of 13 district judges, effective Jan. 1, 2013, in addition to 25 existing district judges, in accordance with legislation enacted in 2011, according to the Bureau of Legislative Research.

Salaries for 25 prosecuting attorneys would remain $119,552 and those for three others would stay at $100,037.

Arkansas Democrat Gazette  

2/12/12  

LITTLE ROCK — For the second time, the Arkansas General Assembly will convene in a fiscal session starting Monday at noon. It will consider Gov. Mike Beebe’s proposed $4.7 billion general revenue budget for fiscal 2013 and possibly a few other matters.

Lawmakers may consider bills that would repeal a sales-tax exemption that the Legislature enacted in 2011 for truckers, allow the Parole Board to deny parole to certain sex offenders, and reduce the mileage rate paid to lawmakers.

But House Speaker Robert S. Moore Jr., D-Arkansas City, said lawmakers should wait until the 2013 regular session to consider the Parole Board matter, and he doesn’t expect the mileage rate to be considered in this fiscal session. Also, some senators are reluctant to consider repealing the truckers’ sales tax exemption in this fiscal session.

During its first fiscal session, which was in 2010, the General Assembly enacted Beebe’s $4.48 billion budget for fiscal 2011 and set the amounts for lottery scholarships. That session lasted 19 days, and then-Senate President Pro Tempore Bob Johnson, D-Bigelow, said that having fiscal sessions was a big waste of time.

Moore said this time lawmakers can complete their business and recess on March 2 and adjourn on March 9. The period for candidates for state and federal offices to file for this year’s elections runs from Feb. 23-March 1. Beebe said he wants law-makers to “approve the conservative balanced budget and go home.”

Fiscal sessions exist because in 2008 voters adopted Amendment 86 authorizing the sessions in even numbered years. Previously, the Legislature met in odd-numbered years in “regular” sessions, during which it enacted the state budget for two fiscal years. Now, during a regular session, a budget for only one year is enacted.

A fiscal session is limited to 30 days with one possible extension of no more than 15 days. As of Friday afternoon, about 300 appropriation bills had been prefiled for this fiscal session.

“I can’t say how harmonious it is going to be, but I don’t think it is going to be contentious,” said Sen. Gilbert Baker, R-Conway, and co-chairman of the Budget Committee. “I am seeing a lot of reasonable, measured discourse going on.”

Moore said he “doesn’t see any issues of a disruptive nature out there.”

House Republican leader John Burris of Harrison said he’s not ruling out trying to defeat appropriation bills,“but that’s not the goal. The goal is to produce a good and efficient budget.”

During the past several weeks, the Arkansas Forestry Commission, with a $16 million budget and 262 employees, has received more attention from lawmakers than virtually any other part of the state budget.

A $4 million shortfall at the commission led to 34 employees being laid off last month and the Republican Party to call Beebe’s request for a $2.66 million supplemental appropriation for the commission the “Beebe Bailout.”

But Beebe last week announced a plan to reallocate $550,000 a year from the state Department of Agriculture to the commission to allow the restoration of 15 firefighters, starting Feb. 21.

Then, state Forester John Shannon, the top official at the commission, announced his resignation Friday.

“I hope the prospects are good [for the $2.66 million supplemental appropriation],” the governor said. “It would be kind of silly to work out something where you can rehire permanently 15 firefighters and then turn around and have to fire the other folks because you couldn’t get a supplemental.”

Burris said, “You have a lot of questions about the overall budget, and people are asking how many other half-million dollar pots [of money] are around.”. He said he has identified multi-millions worth of possible cuts in the governor’s proposed budget, but he declined to provide an exact figure or details about the cuts. “The governor has done a good job of budgeting conservatively, but that doesn’t mean it is perfect,” Burris said.

Beebe’s proposed general revenue budget is part of an overall state budget that totals $24 billion a year.His plan calls for a $163 million general revenue spending increase. As part of the budget, he’s calling for $114 million more for the Medicaid program, $56.6 million more for public schools, and $3.6 million more for the higher education institutions.

Beebe didn’t propose a cost of-living raise for the 33,000-plus state employees who don’t work at the state’s higher-education institutions. The current fiscal year is the first since 1989 in which they don’t get across the-board raises, according to the state Office of Personnel Management.

“I think it is a very tight budget, but I think some people think the budget should be even tighter, and I think that will be one of the discussion points,” said state Rep. Kathy Webb, D-Little Rock, co-chairman of the Budget Committee.

“I don’t think the chances are going to be really good [for a state employee raise],” she said. “As we have continued to pore over the budgets, I have become less optimistic that we are going to be able to find the money.”

Webb said she hopes the Legislature is able to provide merit raises. Baker said the governor’s request for a $114 million increase for Medicaid “is a big chunk of money,” and lawmakers want more information about how the figure was arrived at and how it relates to future changes in the program.

The Medicaid general revenue budget would be $805.96 million. The state Department of Human Services projects a Medicaid shortfall at between $200 million and $250 million in fiscal 2014, which starts July 1, 2013.

Beebe said failing to provide the requested increase affects the delivery of services and exacerbates “the hole that we are already projecting down the pike.”

Burris said he believes that the increase will be fully funded, but lawmakers want to know what’s being done to stop the shortfall and “things we can do to soften the blow.”

The governor’s proposed $56.6 million increase to meet the state’s constitutional obligation of providing an adequate education for students would increase the Public School Fund to $1.99 billion.

OTHER ITEMS

Supplemental appropriations: Beebe has asked the Legislature to provide $30.5 million to supplement several agencies’ spending this fiscal year. The state has about $72.1 million in surplus money. His requests include $12.4 million for the state Department of Correction, $10 million for what’s called the Merit Adjustment Fund, $3.38 million for the State Hospital, $2.66 million for the Forestry Commission, and $1.9 million for the Department of Community Correction.

Administration of Justice Fund: Among other things, this fund pays for some court employees but is running low because revenue has declined. Chief Justice Jim Hannah has told lawmakers that a supplemental appropriation would be sought to shore up the fund through this fiscal year.

Boys and Girls Clubs: Rep. Barry Hyde, D-North Little Rock, said he’s seeking $2.5 million in the Department of Workforce Services budget to serve 12,000 children through a statewide alliance of 54 Boys and Girls Clubs. The alliance’s funding through the Temporary Assistance for Needy Families Program expired on Jan. 31, according to a department spokesman.

Beebe said the clubs do wonderful work but there is “no way to take state funds, which are already pretty strapped, and replace $2.5 million a year in federal funds. And that’s not the only area that’s getting cut from federal fund losses.”

Sales tax exemption: Moore said he wants the Legislature to repeal the exemption that the 2011 General Assembly gave truckers in exchange for the Arkansas Trucking Association’s support for a 5-cents per-gallon diesel tax increase proposed ballot issue. “They withdrew their support on the nickel diesel tax and Lane Kidd [the association’s president] has publicly stated that they support and understand that we are going to repeal the exemption,” he said. The exemption will take about $4 million out of general revenue annually, Moore said. Burris said he supports repealing the exemption, too.

Baker said Moore’s plan “may have some trouble” in the Senate. Sen. Larry Teague, DNashville, chairman of the Senate Revenue and Taxation Committee, said repealing thatexemption might break Democrats’ promise to not raise taxes in the fiscal session. But, Moore said, the exemption “hasn’t gone into effect, so nobody’s hurt. It is not a tax increase. The exemption doesn’t go into effect until July, so we need to take care of it before it goes into effect.”

Sen. Michael Lamoureux, R-Russellville, and vice chairman of the Senate tax committee, said that at this point he opposes repealing the exemption. Senate Democratic leader Robert Thompson of Paragould said he’s hesitant to consider any nonappropriation bills in the fiscal session.

Parole: Rep. David Sanders, R-Little Rock, and Sen. Jonathan Dismang, R-Searcy, want the lawmakers to vote on bills to give the Arkansas Board of Parole authority to deny parole to people convicted of certain felony sex offenses.

The board granted parole to David Kent Pierce, a former music minister who admitted to sexual misconduct with members of a youth choir in Benton. Parole Board Chairman John Felts has said the board would have preferred to deny Pierce parole but didn’t have the authority to do that under state law.

The board, instead, decided that Pierce will have to live outside of Arkansas and cannot go within 50 miles of Saline County or have contact with his victims or their relatives.

Moore said it’s not appropriate to consider this bill in the fiscal session partly because the state law in question has been on the books for about 20 years and “nobody found this to be a lightning rod issue that needs to be changed” in a year-long study of the state’s sentencing laws ahead of the 2011 regular session. Sanders said that “when you have identified a glaring problem … we have an obligation to fix it.” Mileage rate: Rep. James McLean, D-Batesville, wants the General Assembly to consider a bill that, he said, would be aimed at requiring lawmakers to be reimbursed for mileage at the same rate as state employees.

The House, the Senate, the Bureau of Legislative Research and the Legislative Audit Division allow lawmakers to be reimbursed 51 cents per mile for traveling to and from legislative meetings – 4.5 cents per mile less than the maximum rate authorized by the Internal Revenue Service but more than the 42 cents per mile that state employees are reimbursed for business travel.

Moore said he expects McLean to withdraw his resolution from further consideration on Monday. “If leadership wants to focus on fiscal matters, I will respect that,” said McLean. Burris said the state Department of Finance and Administration should increase the mileage reimbursement rate for state employees.

Associated Press

LITTLE ROCK – Arkansas Gov. Mike Beebe says he’s content to have his deputy chief of staff keep running the state Economic Development Commission but isn’t ready to name him the permanent director of the agency.

Beebe told The Associated Press on Thursday he needs Grant Tennille back in his office, but is reluctant to bring him back from his interim director post at Economic Development. Beebe named Tennille to the temporary job in September following Director Maria Haley’s death.

Beebe praised Tennille’s work and said morale is high at the agency under his leadership. But Beebe said he doesn’t plan on removing the “interim” part of Tennille’s title and joked that it keeps Tennille working hard.

2/9/12

WASHINGTON — The number of people seeking unemployment aid neared a four-year low last week, an encouraging sign that strong hiring could continue in the coming months.

The Labor Department said Thursday that weekly applications for unemployment benefits fell 15,000 to a seasonally adjusted 358,000. That’s the second-lowest level since April 2008.

The four-week average, a less volatile measure, fell to 366,250, the lowest since late April 2008. When applications fall consistently below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.

A consistent decline in applications has coincided with the best job growth since last spring.

Employers added a net gain of 243,000 jobs in January, far more than economists had projected. That was the biggest gain in nine months. The unemployment rate fell for the fifth straight month to 8.3 percent.

From November through January, the economy has added an average of 201,000 net jobs per month.

The increased hiring in part reflects faster economic growth. The economy expanded at an annual rate of 2.8 percent in the final three months of last year — a full percentage point higher than the previous quarter.

2/7/12

TAKES NONPROFIT JOB: Rep. Kathy Webb

Multiple sources tell me that state Rep. Kathy Webb of Little Rock was offered this morning and has accepted the job as executive director of the Arkansas Hunger Relief Alliance. It’s an umbrella representative for a number of hunger relief agencies and food banks. It’s supported by private contributions and also a share of money it helps administer in the No Kid Hungry campaign.

Webb will succeed Rhonda Sanders, who left the alliance about a month ago for another job.

Webb, who’s had a long career in the restaurant business, has been an active volunteer over the years in hunger relief efforts and has been on the board of the Arkansas Foodbank Network. She was a a co-owner and co-founder with Nancy Tesmer of Lilly’s Dim Sum Then Some, but no longer has an interest in the venture.

Hunger agencies sometimes have an interest in legislative issues, though the coming fiscal session is supposed to deal strictly with budgetary matters. The 2011 legislature adopted a one-year waiting period for legislators who hope to become lobbyists, but it didn’t apply to current legislators who didn’t seek re-election this year. Webb is term limited. It’s unclear whether her work as director of an agency that is essentially a trade organization for anti-hunger group will include lobbying, but it seems unavoidable.

UPDATE: Webb confirms the new job, says she won’t begin until March 15, which should be after the conclusion of her final legislative session.

Arkansas Democrat Gazette

2/3/12

LITTLE ROCK — Saying that the state is treading water, the state finance department director announced Thursday that state general revenue rose in January to $552.5 million, an increase of $22.6 million, or 4.3 percent, compared with January last year.

That was $15.2 million, or 2.8 percent, above the state’s forecast for the month. With the Legislature just 11 days away from the start of a session focused on enacting a budget, the governor and the state’s top fiscal official cautioned legislators against getting any big spending ideas.

Richard Weiss, director of the Department of Finance and Administration, told reporters that while the state’s revenue is above the amount the state had forecast, much of the money will be returned, as usual, to Arkansans as tax refunds.

“We still are very, very cautious. We are concerned about refunds, particularly at the end of the year, particularly with corporate,” Weiss said. “We are looking at all of this really cautiously.”

He said the $72 million surplus the state currently has could drop by the time the fiscal year ends June 30.

“We’re not expecting any surge of growth. It’ll be great if it happened, but we’re treading water and holding our own,” he said.

The state already has disbursed more than $134 million in refunds to taxpayers this fiscal year, about $30 million more than at the same point last year. These included $86.8 million to individuals and $47.3 million to corporations.

Gov. Mike Beebe agreed with Weiss, saying that the revenue figures shouldn’t affect the fiscal session that begins Feb. 13.

“There’s no evidence that we need to change [the forecast]. It’s about $43 million up for the entire year in net. On a $4.5 billion budget, that’s not much cushion,” Beebe said.

He was referring to the year-to-date net amount available to agencies after the gross amount of revenue has been reduced by making distributions for about a dozen purposes. The net was $42.8 million, or 1.6 percent, above the forecast amount.

Beebe said having a cushion is necessary because it would be difficult for state agencies to make cuts in the last months of the fiscal year if the state had a month in which collections fell.

“You can make adjustments in your budget early a lot easier than you can late. So you always want to have a little bit of cushion going into the last month or two to ensure that you don’t end up in a position where at the eleventh hour you have to make a forecast cut and cut money going to these agencies,” Beebe said.

He said lawmakers shouldn’t plan to use the amount of money that has come in above the forecast, such as for giving employees a cost-of-living pay increase.

“That’d be irresponsible,” Beebe said. “The majority of our state employees are hard workers and I would love to reward them. Right now I’m just happy we’re not firing them.”

Some lawmakers have said they want to provide funding for a cost-of-living raise for state employees. The governor’s proposed $4.727 billion general-revenue budget for fiscal 2013 provides no money for such a raise for the about 30,000 employees who work at agencies other than higher education.

Budget Committee co-Chairman Rep. Kathy Webb, D-Little Rock, said she wouldn’t want to use a onetime surplus to pay for the increase.

“A cost-of-living increase is an ongoing number,” she said. “I for one wouldn’t be comfortable.”

Committee co-Chairman Sen. Gilbert Baker, R-Conway, said the increase for the month shouldn’t change ongoing discussions. He said the state should “hold the line.”

January’s general-revenue collection was the largest gain in one month since the fiscal year began, surpassing September’s collection by about $30.3 million. The biggest monthly collection usually is April when most income-tax returns are due.

The department, in its monthly report, said individual income-tax collections accounted for $310.2 million of the general revenue. That’s a decrease of $800,000, or 0.3 percent, compared with January last year. Collections were $2.3 million, or 0.7 percent, below the January forecast for this category.

“We picked up more in December at the expense of January, but when you look at year to date, we’re still comfortably ahead,” Weiss said.

Corporate income-tax collections accounted for $26.1 million of the general revenue. That’s an increase of $14.5 million, or 125 percent, compared with January last year. Collections were $14.3 million, or 121.5 percent, above forecast.

January gross receipts collections (sales and use taxes, beverage excise and other taxes) totaled $182.5 million, an increase of $8.6 million, or 4.9 percent, from January last year. Collections were above the month’s forecast by $3.5 million, or 2 percent. January gross receipts reflect some of the Christmas shopping season.

Tax refunds and several government expenditures come off the top of “gross” revenue, leaving a “net” that agencies are allowed to spend. In January alone, the refunds were $34 million to individuals and $2.9 million to corporations.

In the first seven months of the fiscal year, which started July 1, the state is $60.3 million, or 1.9 percent, over forecast for gross-receipts collections, and $42.8 million, or 1.6 percent, above the state’s forecast for net available of $2,800.4 million.

1/23/12

LITTLE ROCK — Little Rock city directors will examine capital projects to be paid for with revenue from the September sales tax increase during a work session Tuesday.

“The goal is to begin to lay out the framework for the recommended plan of action regarding the expenditures of the capital portion of the sales-tax initiative,” City Manager Bruce Moore said Friday.

Voters approved increasing the city’s tax rate from 0.5 percent to 1.5 percent. Three-eighths percent of the tax goes toward capital improvements and five-eighths to operations.People now pay 8.5 percent in sales taxes in Little Rock, which includes a 1 percent county tax and a 6 percent state tax.

The capital-improvements portion of the tax will expire in 10 years after generating about $196 million. About $72 million of the money would go toward street and drainage improvements.

“It’s a 10-year plan, but obviously there are some critical things that we feel like we’ll need to move forward with in the next five years or so,” Moore said.

City directors are already moving forward with one project: an $8.7 million emergency communications system to replace a nearly 30-year-old radio system.

In December, Little Rock city directors passed a $158.6 million operating budget that included 57 new jobs ranging from a full-time veterinarian for the zoo to 15 maintenance workers for the Parks Department. Along with the new hires, the budget includes filling 102 positions, including 32 vacant police officer jobs and eight code-enforcement positions.

Little Rock is adding 12 new officers to its Community Oriented Policing program, made up of officers who are stationed at alert centers or are out on bicycle patrols.

The largest chunk of the maintenance and operations budget went to public safety. Combined, the Police Department and Fire Department account for $91.3 million of the operating budget. Along with new police officers, the city plans to hire 12 new firefighters this year. Eventually, the tax will pay for the hiring of 36 firefighters.

Moore said also high on the list of capital projects needed is the completion of a fire station in west Little Rock.

Fire Chief Gregory Summers has said that firemen struggle to meet even 10-minute response times in the western reaches of the city.

Such high response times coupled with other factors put the city at risk of losing its Class 2 ISO rating last year.

Formerly called the Insurance Services Office, the agency rates cities on a variety of factors such as the number of fire stations and response times; the city’s water supply; the equipment available to firefighters, how many are on duty on an average day and the amount of training they have and the city’s 911 dispatch system.After scoring all the factors, an average is taken and class rating assigned on scale in which Class 1 is best and Class 10 is worst. As these ratings drop, fire-insurance rates in the city increase.

On a scale of 100 points, Little Rock scored 81.44 and barely kept its Class 2 rating for 2011.

A residents sales-tax overview committee has yet to be appointed.

Mayor Mark Stodola has said he forwarded to city directors a list of names of people who applied to serve on the committee and had hoped to make appointments Jan. 3.

However, Ward 3 Director Stacy Hurst asked for more time to contact potential members who could serve on the committee. Since Tuesday’s meeting will be dedicated to the capital-improvements budget, the committee appointments won’t come back before the board until the Jan. 31 meeting.

Moore said that whatever the board decides Tuesday will be taken to the public in a series of ward meetings that he expects to begin next month.

The council meets at 6 p.m. at City Hall, 500 W. Markham.

1/19/12

When Insurance Commissioner Jay Bradford “quashed” plans for a state-run health insurance exchange in early December, he noted that Arkansas would join a federal program with little local input.

Not so fast.

It turns out Arkansas is pushing to join a “hybrid” federal-state model that was created in part by the U.S. Department of Health and Human Services (HHS) in response to states not being able to structure state exchanges in the last year.

“When they realized so many states weren’t going to develop state-run exchanges, they moved to this to provide some state input,” said Alice Jones, spokesperson for the Arkansas Insurance Department.

Under the hybrid model — known as the Federally-Facilitated Health Benefit Exchage (FFE) — states would have some flexibility and control over insurance plan selection, rating, monitoring and limited oversight, Jones said. However, there will be no local consumer call center to address Arkansans’ problems. They will be referred to a federal call center for resolution.

In essence, health exchanges were outlined in the controversial Patient Protection and Affordable Care Act signed into law in early 2010. Exchanges are a marketplace for comparing private insurance plans that would primarily serve individuals and small businesses seeking health insurance options. States could ultimately choose to include larger employers in exchanges, which must be up and running by 2014.

REQUEST FOR FEDERAL FUNDS Arkansas is hoping to receive $7.66 million from the feds for the hybrid program. Money from that grant would help determine cost estimates for state participation in the FFE, Jones said. She added that the goal of getting federal funding is to keep Arkansas from spending state dollars.

“Without federal establishment funding, there will be costs to the state with the FFE,” she warned. A timeframe for hearing from the federal government could be months away.

So far, Arkansas has only received $1 million for an initial exchange planning grant. It was the subject of a heated budget debate in the last legislative session, which almost saw the entire Arkansas Insurance Department budget rejected.

The $1 million received and the $7.66 million requested is a pittance compared to other state’s requests.

To date, nearly $729.5 million has been awarded to states for health exchange planning, establishment and innovator grants. This chart, provided by the Insurance Department, highlights each state’s awards so far.

Some states have requested no grant money, while states like Arizona, California, Massachusetts, and Wisconsin have received tens of millions of dollars.

Arkansas’ sister states have received as little as $998,416 (Louisiana) and as much as $55.5 million (Oklahoma).

LETTERS CIRCULATE Gov. Mike Beebe (D) revealed on Dec. 22 that he sent a letter to HHS supporting the state’s request to join the hybrid effort.

“This partnership will allow us to apply for federal money that will permit us to meet our legal requirements using as little state funding as possible,” Beebe said in December. “It will also help to ensure that, as more Arkansans sign up for health-insurance programs, the premium taxes collected on those policies remain in Arkansas and don’t go to Washington.”

“Insurance options are best modeled with local needs and perspectives in mind, and this partnership program will give Arkansas a voice in that process, even with the federal government in control of this exchange,” Beebe added.

Rep. Reginald Murdock (D-Marianna) circulated a letter this week among House colleagues encouraging them to support the FFE.

“We missed our first opportunity to prevent the federal government from having complete control over the implementation of our Health Exchange,” Murdock wrote. “Now Arkansas has another opportunity… The Federally-Facilitated Health Benefit Exchange Partnership Model will allow us, as most states are doing, to have some input into the implementation of our Health Exchange.”

Murdock stressed 4 key points about the FFE Partnership in his letter: 1) There is a cooperative agreement and federal funding for planning Exchange functions that Arkansas is best suited to perform; 2) There is no ‘pay-back’ requirement if Arkansas decides to choose a wholly federally-facilitated Exchange after studying the FFE Partnership Model; 3) Partnership funding will assist the Arkansas Department of Human Services (DHS) with planning Medicaid interfaces needed to connect with the federal enrollment/eligibility portal; 4) If parts of the current law are struck down by the Supreme Court, FFE Partnership funding will have helped Arkansas improve our systems at the Arkansas Insurance Department and DHS.

But some House members who have been skeptical of the state push on federal health care reform from the beginning expressed reservations with the latest plan.

Rep. David Meeks (R-Conway) questioned the need for the FFE hybrid approach in light of a year-long legislative debate and a looming U.S. Supreme Court decision.

“The Fed-State Partnership is just a repackaging of what a bipartisan group of legislators already rejected,” he said. “There is no reason to move forward on an exchange when the law will most likely be found unconstitutional and overturned by the Supreme Court later this year.”

In the 2011 regular session, Meeks filed two bills to deal with health care reform. One bill, HB 1053, would have prevented mandatory enrollment for health insurance — a linchpin of the federal health care reform law.

1/17/12

The NanoBusiness Commercialization Association (NanoBCA) has honored two of Springdale-based NanoMech’s leaders — Jim Phillips, Chairman, president and CEO, and Dr. Ajay Malshe, chief technology officer.  The two men were named to the association’s “Most Influential Nanotechnology Leaders” list for 2011.

“We are so proud of this recognition,” said Phillips. “This national recognition is a tremendous development for us and our company, as we are included on a list of honorees that include some of the best scientific minds and business leaders in the nation. It is both inspiring and humbling to appear on this list of nanotechnology leaders who are creating a more competitive and innovative nation.”

NanoBCA is the industry’s top trade organization dedicated to promoting the commercialization of nanotechnology. Each year NanoBCA develops a list of the top 25 most influential leaders in nanotechnology in America.

“The common thread amongst the honored individuals is that they are all nanotechnology evangelists. Kudos to these leaders for their contributions to our nanotechnology community,” said Vincent Caprio, executive director of NanoBCA.

“Mr. Phillips keynoted our annual meeting this fall, and the membership and audience were especially appreciative of his ability to articulate how the nanoscale material science revolution is very similar in scope and importance in terms of innovation and transformation as was the digital revolution of the 20th century,” Caprio added.

Nanomech, which evolved from research being conducted at the University of Arkansas, has produced several innovative product lines using nanotechnology.  For more on the company, visit this feature story from Talk Business.