LITTLE ROCK – Today I want to share the good news that we ended the 2019 budget year with a $295 million surplus.
That means more people are working, we are controlling spending, and intentionally saving.
A budget surplus doesn’t happen by accident. Just like in your family budget, if you’re going to save, saving has to be intentional. You don’t spend more than you make.
We achieve that through efficient spending. Efficient spending requires a careful examination of every agency budget. We don’t cut budgets just so we can say we have saved money. We reduce where it makes sense.
Sometimes this means we invest more money in some programs even as we trim others.
When we succeed at this, we have the benefit of putting money into our long-term savings account, which we did again this year. Every month, we transfer money into our savings account. As you can see, our savings is intentional.
The question I often get asked is, “well now that you have this surplus, what’s going to happen to it?” The answer is that 25% of the surplus, or $73 million, was transferred to the Highway Transfer Fund to be available for highway needs. The remaining balance was distributed to two reserve funds: almost $50 million in one fund that can be used in an emergency, and the remaining $173 million cannot be touched until the General Assembly meets again.
As a result, our long-term reserve fund, or savings account, now has a balance of $150 million. That allows us to meet the needs when we have unexpected events, such as the Flood of 2019.
The evidence that we are spending efficiently is that the extra money was available to put into savings and to put into public safety even as we have cut the personal income tax rate. Our prudent spending allowed us to increase the minimum pay for starting teachers over the next four years.
We haven’t reduced support for essential services, and we have increased spending where that support is essential.
That’s part of my plan to reorganize and transform Arkansas government. Under my plan, which cut 42 executive-level agencies to 15, we are more efficient, more responsive, and more customer friendly. We are leaner and stronger.
Arkansans are seeing a good return on their investment of hard work, as we work to allow Arkansans to keep more of their paycheck in their own bank account.
It’s about growing our economy. Today we have more people working and paying taxes than we did five years ago and, in fact, more than any time in history.
We also achieve these levels by attracting new industry and creating new jobs. We have created more than 90,000 jobs over the past five years. Wages are increasing as well.
Arkansas is doing well, and we are well prepared for the inevitable down times. I am grateful for the leaders in our state who have joined me in the responsible management of state resources.
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