Lawmakers advance $4.5 billion spending plan

Lawmakers on Thursday advanced Arkansas Gov. Mike Beebe's $4.5 billion spending plan for the upcoming year, as legislative leaders said the state's first fiscal session could wrap up as early as next week.

The Joint Budget Committee endorsed the proposed Revenue Stabilization Act, which sets the state's spending priorities based on expected revenues. The measure heads to the House floor for a vote next week.

Beebe's proposal increases general revenue spending by $176 million. It restores most of the $206 million in budget cuts that have been made over the past year.

Sen. Gilbert Baker, co-chairman of the panel, said "there's still some angst" among lawmakers about Beebe's proposal to borrow $10 million from the legislative side of the General Improvement Fund to pay for budget needs. Beebe has proposed using money from the fund — surplus money used for one-time projects — to pay for several needs, including reimbursing counties for housing state inmates.

Beebe has also proposed borrowing $3 million from his portion of the fund. The money would be repaid by any fund balances state agencies have by June 30, 2011 — the end of the next fiscal year.

Sen. Randy Laverty defended the Legislature's interest in the fund, and said he wanted to make sure there would be money available for projects such as grants to rural fire departments.

"I don't really care what the central Arkansas press thinks, if I'm interested in helping my local volunteer fire department," Laverty said. "I don't have any qualms about being very interested in this money."

Rep. Bruce Maloch, co-chairman of the budget panel, said he believed the plan to use the project money for the immediate budget needs was gaining support among House members.

"I think most folks are getting comfortable with that," Maloch said. "I think they realize the procedure we're putting in place will allow recovery of some of those funds."

The legislation also proposes allowing the state to use up to $25 million from the Budget Stabilization Trust Fund — the cash fund the state uses to pay bills — in June to pay for tax refunds if they exceed expectations.

Richard Weiss, the director of the Arkansas Department of Finance and Administration, said he didn't expect tax refunds to come in higher than expected. Weiss said the fund has about $230 million in it right now.

"This is just a cautionary move to give us some comfort factor," Weiss said.

At one point, Rep. Curren Everett, D-Salem, asked Weiss if the governor could borrow money from that fund to pay for the immediate budget needs rather than use lawmakers' project money. Weiss told him that he would recommend against doing that because the fund is intended to pay the state's bills.

The Legislature has been meeting for a fiscal session, the first under a constitutional amendment approved by voters in 2008 requiring lawmakers to meet and budget annually. The session had been expected to wrap up by early March, but Maloch and Baker said Thursday they believed it could end by Feb. 26.

Maloch said he expected the House to vote on the spending plan on Wednesday or Thursday. The House and Senate recessed until Monday.

Also Thursday, the budget panel endorsed legislation that would bar the state from paying the legal bills for defendants represented by private attorneys.

The legislation would allow payment only for lawyers who get clients through the Arkansas Public Defender Commission. The measure is in response to Abdulhakim Muhammad's request that the state pay his legal bills.

Muhammad is charged with capital murder of Army Pvt. William Long and the wounding of another soldier outside a Little Rock recruiting station. He's claimed the shootings were justified because of U.S. military action in the Middle East.

The proposed restriction wouldn't affect Muhammad because it is included in the commission's budget for next fiscal year. The commission is appealing to the state Supreme Court a Pulaski County judge's order that it pay for Muhammad's legal expenses.

"This is aimed at future cases of a similar nature," said Sen. Jim Luker, D-Wynne, who proposed the restriction.