Governor Hutchinson Introduces 2020 Budget

Posted November 19, 2018 By Leah Nelson In Government

Last week, Gov. Hutchinson proposed a state general-revenue budget of $5.75 billion for fiscal 2020. The budget is $125.2 million more than this year’s budget, with most of the increase going to human services and education programs, including a boost in starting teacher pay.

State agencies began presenting Gov. Hutchinson’s proposed balanced budget to the Arkansas Legislature in October. Arkansas has a unique budget system that prevents expenditures from exceeding revenue. The “Revenue Stabilization Act” passed by the Arkansas Legislature in 1945 established the rules for Arkansas budgeting and spending to prevent over-spending. The Revenue Stabilization Act states that various levels of funding based on priorities will be determined each legislative session.

If approved, the budget for the next fiscal year includes funding for more state police and parole officers, an increase in the state’s minimum teacher salary, as well as sets aside $111 million for income tax cuts. The balanced budget also accounts for a $38 million hit to state revenues due to the authorization for the state to license four full-fledged casinos, which passed recently in the midterm election.

“As a balanced-budget state, it is important that we control spending while determining how to best fund our priorities, said Gov. Hutchinson. “This balanced budget takes a responsible approach to funding our areas of need, including education, foster care and mental health, while also lessening the tax burden on Arkansans.”

Arkansas Constitutional Amendment 20, passed in 1944, prohibited the State from borrowing money without a vote of the electorate. Unlike the federal government and many other state governments, the State of Arkansas cannot borrow money to balance the budget.

Hutchinson said the budget aligned with legislators’ priorities, but he expected the most fight on the $111 million set aside for tax cuts from lawmakers with other spending priorities.

The Legislature will decide on a budget in the regular session starting Jan. 14.