Proposed Budget - Fiscal Year 2022
On January 11, Arkansas Governor Asa Hutchinson released a $6.04 billion general revenue budget proposal for fiscal 2023. This represents an increase of $194.7 million over fiscal 2022, or 3.3 percent. Gross general revenues are projected to be $7.5 billion in fiscal 2023, a 2.6 percent increase over fiscal 2022, while net available revenues are projected at $6.2 billion, an increase of 1.7 percent. In a December special session, the state passed tax cuts that will gradually reduce the top individual income tax rate from 5.9 percent to 4.9 percent by 2025; it also provides a $60 tax credit to low-income taxpayers. In response to the changes, a revised general revenue forecast was released on December 16, noting that the changes result in estimated reductions in general revenue of $135.3 million in fiscal 2022 and $307.4 million in fiscal 2023. The fiscal 2023 budget proposal includes a surplus of $174.4 million and the governor noted there is $1.2 billion in the Catastrophic Reserve Fund.
Proposed Budget Highlights
The governor included several priorities in the budget proposal including those that strengthen Arkansas families, help victims of crime, and support law enforcement. Below are specific proposals, including recommended year-over-year increases from fiscal 2022 to fiscal 2023:
- $69.6 million increase for the Public School Fund.
- $28.5 million increase for the educational facilities partnership.
- $12.9 million increase for institutions of higher education, including $5.3 million for historically underfunded institutions.
- $57.4 million in existing funds to support the public school employee health insurance fund, with an additional $50 million remaining in the restricted reserve fund for this purpose.
Child Welfare and Human Services
- $66.3 million increase for human services programs.
- $11.1 million to strengthen the child welfare workforce.
- $37.6 million to reduce the waitlist for services for those with developmental disabilities.
- $6.1 million increase for behavioral health.
- $7.5 million increase for the State Police to improve recruitment and make the starting salary for new troopers more competitive in the region, while also benefiting those with seniority.
- $2.3 million for the Crime Victims Reparations Board to supplement revenue generated from court fees and provide a stable funding source.
- Funding Child Abduction Response Teams for the first time through the Criminal Justice Institute and funding two new drug courts in the northeast part of the state.
- $3.9 million increase for the Division of Correction.
- $5.8 million increase for the Economic Development Commission.
- $16 million for the Performance Fund, which can be used to help pay for merit raises for state employees and the 27th pay period in fiscal 2023.