Ark gov. proposes repaying lawmakers' project fund

By ANDREW DeMILLO

LITTLE ROCK, Ark.

Arkansas Gov. Mike Beebe on Wednesday proposed repaying any money he takes from a fund that lawmakers use for one-time projects to help pay for various budget needs.

The Joint Budget Committee reviewed legislation outlining Beebe's proposed $4.5 billion spending plan for the upcoming year, which includes the proposed loan from the state's General Improvement Fund.

Beebe has proposed using $10 million from the legislative portion of the fund -- surplus money used for construction projects chosen by lawmakers -- and $3 million from his side to pay for various budget items. Most of the money Beebe seeks would go toward reimbursing counties for housing state inmates.

Beebe's proposal, introduced Wednesday, calls for paying that money back using any fund balances from state agencies left by June 30, 2011 -- the end of the next fiscal year. The legislative portion of the fund would be the first repaid, followed by the governor's portion, if the fund balances are available.

"This provides some opportunity to get all or most of that GIF money back," said Rep. Bruce Maloch, co-chairman of the Joint Budget Committee.

The proposal was included in the Revenue Stabilization bill, which sets spending priorities based on expected revenues. Beebe's proposal to use the $13 million in General Improvement Fund money will be considered in separate legislation.

The budget panel was expected to vote on the spending proposal Thursday. The Legislature is meeting for a fiscal session, the first under a constitutional amendment voters approved in 2008 requiring lawmakers to meet and budget annually.

Beebe's proposal would increase the state's general revenue budget by about $176 million, restoring most of the $206 million in cuts he's ordered over the past year due to lagging tax collections.

Beebe originally had called for using the GIF money for some budget needs, but had agreed to the suggestion by lawmakers to repay the money using the fund balances state agencies may collect. Maloch, D-Magnolia, told the panel that in recent years those fund balances have ranged from $7 million to more than $20 million.

Beebe's office said he agreed to include the proposal in his Revenue Stabilization bill after talking with Maloch.

"When he talked to Maloch about it, he agreed it was a good idea and we agreed we would make it part of our proposal," Beebe spokesman Matt DeCample said.

The exact amounts sought by Beebe from the fund weren't outlined in Wednesday's bill, and lawmakers are expected to consider that in separate legislation.

The proposal faced skepticism from some lawmakers who said it would limit the money available for the Legislature in future years for one-time projects.

"At some point, it becomes as if you're eating your seed corn," said Sen. Jim Luker, D-Wynne.

Beebe's proposal also calls for moving $21 million from the state's unclaimed property proceeds trust fund to a fund to help schools provide an adequate education.

Richard Weiss, director of the state Department of Finance and Administration, said the state had drained most of its reserve funds for public schools due to budget cuts over the past year.

"This is a prudent measure, a conservative measure, where we feel we need to plug this money," Weiss said.