Paycheck$ and Politics Newsletter: Issue 16

State agencies came to the table in January 2003 with budgets that were already cut by $362 million. They sought approval for budgets that were higher than the current FY2003, but still lower than the approved budget from the 2001 session. Falling revenues during 2002 and 2003 caused extensive cuts to be made by all state agencies. Approving a budget without any restitution of previous cuts would have resulted in elimination of essential services to the citizens of Arkansas.

When the special session began on May 5, 2003 state agencies had placed requests for $3.5 billion dollars in FY 2004 and $3.6 billion dollars in FY 2005 into the budget process. The dilemma faced by legislators was that revenue projections for FY2004 and FY2005 fell far short of that amount.

The shortfall amounts for FY 2004 and FY 2005 are reflected in the table. Legislators were looking to either raise taxes or identify sources of one time money to alleviate the shortfall. Several solutions were pieced together to provide the funds needed for the state budget. Part of the solution was voted on in the regular session and part of it was approved during the special session. The second table reflects how the dollars were raised.