Gov. Asa Hutchinson is proposing a $5.3 billion budget for the next fiscal year, a $143 million spending increase primarily directed to the Department of Human Services.
About 15 percent of the increase would go to education with most other agency budgets staying flat. The governor said the uptick in spending in the budget plan released on Tuesday is mostly geared toward meeting shortfalls in the foster care system.
“We are underfunded in our foster care programs. This simply puts money to keep up with the children that we have responsibility for. This is not even enough money to keep up with the needs recommended by the Paul Vincent Report,” said the governor referring to an independent investigation conducted last year. “But this meets the current needs.”
Governor Hutchinson’s budget is predicated on the state Legislature adopting his version of Medicaid expansion known as Arkansas Works. For weeks the governor has promised to release two budgets, one with expansion and one without, but he opted to only present one budget. Hutchinson explained the decision to reporters.
“One, It’s easier to digest one budget and because of the momentum we’ve achieved for Arkansas Works I wanted to present one budget that includes the premise that we have Arkansas Works as part of that budget and the savings that are associated with it,” he said referring to a successful primary for slate of Arkansas Works-friendly state legislators.
The governor may not have released a comprehensive alternative budget on Tuesday but he did offer a window into what it could look like.
“It would be over a $100 million shortfall annually to our budget. It would mean that we would have to cut significant services in education, and prisons, and public safety and diminish our services to our citizens,” said the governor. “It could be a six percent across the board cut.”
The budget proposal also did include the governor’s desire to find $835 million in savings from the traditional Medicaid program over five years. A legislative task force gridlocked on issuing recommendations on how to achieve the savings with a divide over the use of managed care. Hutchinson said the budget could look much different if legislators embrace his plans to change traditional Medicaid.
“The biggest thing that we can do is to enact the savings that I proposed in Medicaid,” he said. “Those are the kinds of savings that allow us to not only reform Medicaid but create savings to meet other needs form foster care to the disability waiver list.”