By John Lyon
Arkansas News Bureau

LITTLE ROCK — The Legislature convened its first-ever fiscal session today to craft a one-year budget in lean times for state revenue.

Lawmakers also will set amounts for college scholarships funded by the new state lottery — likely $5,000 for four-year schools and $2,500 for two-year institutions beginning this fall for current students as well as incoming freshmen.

Speaking to a joint session of the House and Senate, Gov. Mike Beebe urged lawmakers to stick to budget issues and take care of business swiftly.

“We have the opportunity and the responsibility to set the tone for future (fiscal) sessions by acknowledging the will of the people and keeping this session focused, brief and on the budget,” the governor said, echoing earlier comments by House Speaker Robbie Wills.

“Let’s get in, let’s get the job done, and then let’s go home,” Wills, D-Conway, told colleagues shortly after gaveling the House to order about noon.

In the only legislative action Monday, the Joint Budget Committee endorsed legislation that would appropriate $35.5 million to fund expenses of the executive, judicial and legislative branches next fiscal year. The measure does not contain raises for constitutional officers, judges or legislators.

The Legislature convened amid a winter storm that blanketed Central Arkansas with snow and freezing rain. Bad weather did not prevent most legislators from getting to the Capitol, with 96 of 100 House members and all 35 senators present. The House planned to meet Tuesday. Senate leaders said staff members could stay home since the chamber had no bills to consider.

The fiscal session is the outgrowth of a 2008 constitutional amendment voters approved requiring the Legislature to meet annually instead of every other year and adopt annual budgets rather than for two years as before.

Under Amendment 86, the fiscal session can last no more than 30 days but can be extended by 15 days with a two-thirds vote in the House and Senate.

In his speech, Beebe acknowledged Arkansas is experiencing tough economic times — his administration has lopped $206 million from the state’s current $4.4 billion budget since October due to declining revenue.

But thanks to legislative foresight and fiscal discipline, the state is in better shape that most, the governor said. He noted California has addressed its budget deficit by laying off 27,000 teachers, releasing 40,000 state prisoners and raising traffic fines by hundreds of dollars.

“Because of you, Arkansas has not laid off a single teacher,” Beebe told legislators. “In fact, you all have increased funding for schools, and we haven’t been forced into those massive releases of prisoners in our penitentiaries.”

The governor has proposed to use up to $9 million in surplus funds to reimburse counties for housing state inmates awaiting space the overcrowded prison units.

He said his proposed $4.5 billion budget for the coming fiscal year restores spending cut from this year’s budget, “but that’s all it does. It keeps everything flat, and all of us, I recommend, suffer together.”

Beebe said the only topic legislators should take up aside from the budget is the state lottery.

Last week, a legislative committee that oversees the lottery rejected the governor’s recommendation that students already in college receive smaller amounts from lottery scholarships. Beebe indicated today he is willing to give in to the legislators’ wishes.

“While I am notoriously conservative about money, and while I would prefer to err on the side of being overly conservative, in this democracy that we have I am willing and able, if you are convinced that we can make it, to go a little bit higher than my own conservative values would have suggested,” he said.

But Beebe said he would do so “with the caveat and warning that it will be up to this Legislature every year to look at and adjust those amounts accordingly, keeping in mind, I hope, that once we establish a scholarship for a new student we live with that amount and keep that faith throughout those four years of college for that student.”

Another issue Beebe might have to reconsider is a proposed $34.5 million reserve fund, into which would flow any revenue collections above state projections for use by the governor.

Some legislators have been cool to the idea of a reserve fund for the governor, saying the revenue should flow to the state general fund.