LITTLE ROCK — Republican legislative leaders say they will present an alternative to Gov. Mike Beebe’s balanced budget proposal that slashes growth spending and includes up to $150 million in tax cuts.
The Beebe administration says the math does not add up.
Talking to reporters Friday, House Speaker Davy Carter, R-Cabot, asserted that simply reducing spending growth — not cutting spending below current levels or using one-time surplus funds — would make the tax cuts possible within a balanced budget. He declined to specify where the growth would be cut.
“It’s a work in progress,” he said.
Rep. Charlie Collins, R-Fayetteville, chairman of the House Revenue and Taxation Committee, said legislative leaders are not looking at the budget in terms of finding places to cut growth.
“If you look at the budget from last year and then just hold everything flat and then take all the new money and then start with, ‘Where would you add new money in?’ that’s how I would recommend that you think through it,” he said.
No one is looking to touch growth in K-12 education, and Medicaid has a shortfall that the Legislature is looking to plug with a combination of surplus money and general revenue, Collins said. Asked if he foresaw holding every other part of the budget flat, Collins said he was not predicting that, but he called it “a possibility.”
State Budget Administrator Brandon Sharp said the administration does not see how the approach outlined by legislative leaders could work.
“The governor’s balanced budget has $209.8 million in growth proposed for FY ‘14,” he said. “Of that, $140 million is for education and Medicaid, so if you take the $209.8 (million), minus $150 (million), that leaves you with $59 million. So you could fund the (public school) adequacy requirement of $49 million and you would have $10 million left for the entire rest of the budget.”
Asked if he sees $150 million as a hard-and-fast target or a starting point for negotiations, Collins said $150 million is only one number on the table.
He noted Senate President Pro Tem Michael Lamoureux, R-Russellville, has suggested a figure of $100 million, while Beebe’s preferred number is zero, aside from a grocery tax reduction that Beebe proposes to tie to certain economic triggers.
“Those are three different numbers from three people who have a lot of influence on the answer,” Collins said.
So is the budget process likely to be resolved with a compromise or a partisan showdown?
Sharp noted that tax-cut bills and the annual revenue stabilization bill, which sets spending priorities, both require only a simple majority vote — as does a vote to override a gubernatorial veto.
With 51 seats in the 100-member House and an larger majority in the Senate, Republicans theoretically could force a budget through without the Democratic governor’s support, “if they vote as a block,” Sharp said.
But Carter said legislators will work with the governor to come to a budget agreement.
“We won’t just plop a bill down and take a vote,” he said.