Our first fiscal session

Beginning February 8th, Arkansas takes a historic step in how our fiscal policies are made. The General Assembly will convene its first-ever fiscal session on Monday. The session can last up to 30 days, unless three-fourths of the State Senate and House of Representatives vote to extend it for up to 15 additional days. The purpose of this session is to debate, refine, and enact a state budget for the next fiscal year, which will begin on July 1.

You, the people of Arkansas, voted in 2008 to add these fiscal sessions to our regular biennial sessions. That approval was given with the idea of keeping these fiscal sessions limited to budget matters. While our legislators could consider any other bill approved by two-thirds of both houses, the consensus appears to be to leave substantive legislation for the next regular session, which will arrive in January of 2011. As with all efforts in government, I believe it's essential that elected leaders keep faith with the voters.

The only substantive issue that must be addressed immediately is setting the amounts of college scholarships funded by the new state lottery. Legally, those amounts must be set by February 28, so we were prepared to finalize scholarships during this session.

As for our state's budget, we must be cautious and conservative as we create and implement our plans for the coming fiscal year. State government must live within its means, just like Arkansas's families and businesses have to do. The slow recovery of the national economy has stretched those means thin the past six months and resulted in two rounds of budget cuts. I have recommended to legislators a conservative general revenue budget of $4.5 billion, which restores this year's budget cuts but holds the line on growth. Though we are beginning to see slight improvement in state revenue, we must remain cautious and monitor the budget on a constant basis.

I have asked legislators to consider creating a $35 million reserve fund that could be used to fill budget gaps in the event that the recovery slows. As the economy remains uncertain, we must ensure that essential state services are preserved, particularly in education, health care, and the prison system. Our General Assembly realized this risk last year, and set aside $40 million in rainy-day money that has been vital in avoiding deep cuts to Medicaid or forcing us to release dangerous prisoners prematurely.

This new reserve fund aims to offer that same protection moving forward. The money may never materialize if our recovery continues to slow, but if the recovery does allow money to flow into this fund, help will then be available to preserve state services against future economic bumps in the road.

This fiscal session will be a learning experience for all of us. As the first of its kind, it will establish a precedent by which future fiscal sessions will be crafted and measured. I am eager for it to move swiftly and efficiently, and for the members of our General Assembly to set an example of that efficiency as they ensure that Arkansas and its people have the services they need as we move toward a new fiscal year.