Gov. Asa Hutchinson Announces $100M Cut in Proposed Budget

LITTLE ROCK, Ark. (News release) – Governor Asa Hutchinson has cut $100 million from his proposed budget for Fiscal Year 2019 and projects a surplus of $64 million.  

The Governor reported the reduction and projected surplus to legislators today at a joint budget committee hearing as they prepare for the 2018 Fiscal Session, which begins February 12.

“This budget reflects real spending cuts in a number of agencies that we achieved through efficiencies without cutting services,” Governor Hutchinson said. “This budget shows a slower growth in Medicaid spending. It meets the requirements of education adequacy. It increases funding for public safety. And of great significance, the budget reduces our historic reliance on surpluses to fund ongoing budget needs.”

The Governor cited a few areas in which the state has improved as a result of the state’s growing economy: 

  • The lowest level of unemployment in Arkansas history. 
  • A record number of Arkansans in the workforce.
  • Increased wages.
  • Decreased Medicaid enrollment.

“The $100 million tax cut we enacted in 2015 – which is fully in place now – has put more money in consumers’ pockets. And because consumer confidence is high, the extra money is in the stream of commerce,” the Governor said. 

The Governor listed other highlights:

  • The Education Adequacy Fund is sufficient to meet the legislative mandate for education spending in order to achieve adequacy without relying on general-revenue transfers. This eliminates the need for the transfer of $50 million from General Revenue. Click here to read a letter sent Hutchinson sent Tuesday to Presidents and Chancellors of Arkansas's Four-Year Universities that asks them to freeze tuition.
  • Transformation efforts in the Department of Humans Services has reduced the number of Arkansans on Medicaid by more than 117,000 in the past year.

In a break with tradition, the Governor has not incorporated any of the surplus into the budget. Instead, the surplus will help safeguard state operations against an unexpected economic downturn and could set the foundation for potential cuts to the state’s income tax. In addition, a portion of state surplus funds will be earmarked to help fund future highway construction in the state.

The Governor used two graphics in his presentation today. You can find these graphics HERE and HERE.


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