- Associated Press - Tuesday, March 11, 2014

LITTLE ROCK, Ark. (AP) - Arkansas lawmakers approved a $5 billion budget on Tuesday that boosts funding for public schools and prisons as the Legislature neared the end of a session that’s been dominated by debate about the state’s compromise Medicaid expansion.

The House and Senate passed identical versions of the budget legislation, formally known as the proposed Revenue Stabilization Act. Both chambers are expected to give final approval to the budget on Wednesday before recessing this year’s session.

The budget legislation easily cleared both chambers with little debate, a contrast to the fight over the state’s “private option” Medicaid expansion that was reauthorized last week despite efforts by opponents to defund the program. Questions about the program’s future had delayed negotiations about the budget bill.

“Before we passed the private option, there was a huge piece of the puzzle that we couldn’t account for,” said Rep. Duncan Baird, R-Lowell, co-chairman of the Joint Budget Committee.

Under the private option, Arkansas is using federal Medicaid funds to purchase private insurance for low-income residents. It was approved as an alternative to expanding Medicaid under the federal health law. Gov. Mike Beebe had warned that not reauthorizing the program would require cutting $89 million from his budget, which relied on savings from the program cutting down on hospitals’ uncompensated care expenses.

The budget poised to win final approval Wednesday closely mirrors the proposal Beebe, a Democrat, laid out to the Republican-controlled Legislature in January. It calls for increasing state spending by $108 million, with $65 million of that increase going toward the state’s schools.

The measure passed the Senate on a 34-1 vote, while it passed in the House 90-8.

One Republican lawmaker urged passage of the measure, saying he hoped debate over the private option didn’t distract legislators from the budget’s benefits.

“I hope that everybody here appreciates it, because it’s balanced, it funds the needs of the people. It sends some money back to the taxpayers, and I think at the end of the day we passed a very conservative budget that did right by the citizens and does right by the state government,” said Rep. John Burris, R-Harrison.

But the handful of lawmakers voting against the budget cited concerns about the private option and other issues, saying they didn’t believe the legislation did enough to control the growth of state spending.

“Am I for funding the schools and all that? Absolutely. But there’s enough concerns I have that this just continues to grow government too much,” said Sen. Bryan King, R-Green Forest, the only senator to vote against the measure.

The Senate also gave final approval to a measure exempting the sand used in the drilling of oil and natural gas from state sales taxes, despite objections from state finance officials who said including such a break in a budget bill raises constitutional concerns. The exemption was included in the budget bill for the Department of Finance and Administration’s revenue services division.

A Pulaski County circuit judge has ruled that sand qualifies as equipment, meaning taxes can’t be collected on it. Lawmakers say they’re clarifying the law to follow the judge’s decision. Beebe’s office declined to say whether he’d sign the measure into law or veto it.


Associated Press writer Ken Miller contributed to this report


Follow Andrew DeMillo on Twitter at www.twitter.com/ademillo .

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