Legislative issues: : Looking at state's budget proposal
Posted on Wednesday, November 19, 2008
The governorís budget proposal calls for reducing the state sales tax on groceries by a penny, which would lower state taxes by about $ 30. 1 million a year.
The grocery sales tax is now 3 percent. It was 6 percent in 2007 when the legislature reduced it by half at the governorís urging. If the legislature approves the additional cut of a penny in the grocery tax, it would go down to 2 percent.
The administrationís balanced budget proposal for next fiscal year estimates state revenues of about $ 4. 5 billion. The overwhelming majority of that amount comes from the state sales tax and the state income tax on individuals and corporations.
State government will provide an adequate education for public school students, because of laws passed in previous years designed to free the state from Supreme Court jurisdiction in a school finance lawsuit.
The Department of Human Services, which is the stateís largest single agency, would get about $ 1. 04 billion next year in state general revenue, although its annual budget is much larger because the state funds are used to garner federal matching funds, often at a 3-to-1 ratio. The departmentís total budget is about $ 5 billion when revenue from all sources is added up.
One of the fastest growing segments of its budget is the Medicaid program, which pays for nursing home care, as well as prescription drugs and health services for the elderly, the poor and people with disabilities.
The Medicaid portion of the Human Services Budget is expected to increase from about $ 3. 9 billion a year to $ 4. 46 billion next year. Medicaid officials in the Department told legislators that the Medicaid program serves about 1. 3 million people a year in Arkansas.
Another division in the Human Services Department, Children and Family Services, also hopes to get a significant budget increase. It operates the stateís foster care program. Cases of abuse have surfaced in the past few years and the administration and the legislature say reforming the system is a priority. That will take additional funding, mainly to hire more case workers.
Budget plans for next year would lower the average case load from 30 per caseworker to 22. That would be possible with the addition of 80 to 100 new employees.
The ultimate goal is a caseload of 15 per worker. In Arkansas there are about 7, 000 in foster care at any given time, according to officials at Children and Family Services who say they will improve the divisionís support of foster parents and step up recruitment efforts to find additional ones.
The Human Services Department has 11 divisions that provide mental health care, treatment of drug and alcohol abuse, and care for people with developmental disabilities, troubled adolescents, the poor and the elderly. Also, the Department provides food stamps and welfare.
One reason for its budget increases is that health care inflation steadily outpaces the general inflation rate. Another factor is that during difficult economic periods, more people become eligible for services because they are laid off or because their hours are cut back by their employers.
State prisons would get $ 287 million in state general revenue next fiscal year, under the governorís budget.
If you have any questions or comments about legislative issues, please contact me at HendrenK @ arkleg. state. ar. us or call me at 479-787-6500, extension 30.
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