Revenue Stabilization Act

Arkansas State Capitol

LITTLE ROCK, Ark. (AP) - Arkansas lawmakers have approved the state's $5.6 billion budget for the coming year, wrapping up this year's fiscal session in four weeks.

Legislation detailing Arkansas' proposed $5.6 billion budget for the coming year calls for increasing funding for Medicaid and setting aside nearly $64 million in surplus funds.

Lawmakers on Monday got their first look at the proposed Revenue Stabilization Act, the budget bill that calls for a nearly $173 million increase in spending for the fiscal year that begins July 1. The Joint Budget Committee is expected to take up the measure on Tuesday.

Days after Arkansas's biennial fiscal session began last month the CSPAN bus rolled into Little Rock, and Gov. Asa Hutchinson hopped aboard. The very first question moderator John McArdle put to Hutchinson was about a balanced budget — specifically, does Arkansas have one?

"Oh, absolutely. We don’t have a deficit in this state. It’s mandated by the [state] constitution to have a balanced budget, which means that we forecast the revenues, then we spend according to that forecast, and if during the course of a year, we don’t meet forecast then we reduce spending. ... We call it the 'Revenue Stabilization' law, which is a toggle, if you will, but it makes us control spending, reduce spending as needed, to make sure it mirrors our revenue picture.  There’s a few things the federal government could learn from this."