Arkansas needs to operate with an annual budget
Posted on Sunday, October 26, 2008
Rewind to 1874 when the
main mode of transportation
was a horse, there wasn’t
indoor plumbing and written communication took weeks to disperse. The Constitution of Arkansas was formed setting biennial budgets for our state government. Back in a time when our state relied on agriculture and life moved at a much slower pace there wasn’t much need to adjust the State’s budget on an annual basis. Fast forward to 2008 where you drive your car everywhere, text message or email your friends to see where they are and check on the stock market with the click of a mouse. Today trillions of dollars circle the globe on a daily basis and our markets swing several hundreds of points up or down. Life and our economy have changed in the last 134 years.
With the rapid pace of our markets it has become extremely difficult to predict what is going to happen next. Even former Federal Reserve Chairman Alan Greenspan admitted recently that if we can predict what is going to happen with our economy 60 percent of the time we are doing well. But doesn’t that mean we miss it around 40 percent of the time ?
Understanding budgets isn’t easy and often you have to constantly monitor what is happening with your money. People do this at home by looking at their bank accounts online daily, weekly or balancing their checkbooks with their statements. Imagine setting your household budget for two years without any idea that there might be a drop in your income or that unpredicted medical bill or household repair would occur. If it doesn’t work for your household do you think it works any better for state government ?
My experience as a legislator for six years serving District 94, a business owner and accounting professional led me to the conclusion that legislative oversight of our state budget has become extremely complex. My legislative career began with budget constraints and cuts in 2003. Only four years later during my last legislative session in 2007 the legislature was dealing with nearly a one billion dollar budget surplus. We can do better.
In fact in today’s fast-paced economy your 135 members of the General Assembly are expected to understand a $ 10 billion biennial budget and its intricate complexities in 90 days every two years and expect that a 30 month forecast will be accurate. Oh sure, the executive branch can handle it while legislators are back in their districts. Who needs that old notion of separation of powers between the branches of government or better legislative oversight ?
As a newly elected legislator you have to be prepared. Under the current era of term limits in Arkansas, which I support, you have to work hard to quickly gain the knowledge necessary to operate under the parameters of state government. With nearly a third of the membership of the House turning over each session many new members are trying to get up to speed on how government budgeting works. By having an annual budget, your legislators will have much more exposure to the budget process so they can understand it better in order to ask the difficult questions that sometimes go unasked.
Some say our current budgeting process is just fine. In fact change is always a difficult thing to deal with especially when it affects you and you are a state agency director or receive money from state government. Right now the legislators set a two year budget and go home with hopes that the forecasts are right. And if by some chance there is a major issue with our budget and revenues are down then the governor has the authority to call us into session to deal with the issue.
The governor’s authority doesn’t need to change. In fact, I think that the authority of a governor to call special sessions is still an important mechanism for our state government to run properly. That is why the current amendment does not change that authority. However, the current system does leave the decision making about budget priorities for nearly 20-21 months in the hands of one individual regardless of party or administration. Once again we turn to the concept of balance of power. Inequality of branches doesn’t allow for proper checks and balances and annual budget sessions would move us more in the direction of proper oversight.
Recently the Farm Bureau and the Arkansas State Chamber of Commerce joined the Municipal League and the Arkansas Association of Counties in their opposition. These organizations set an annual budget and many of their members do as well. Cities and counties are required by Arkansas law to have annual budgets. If other forms of local government operate on annual budgets shouldn’t your state government ? In fact, Arkansas is only one of five states that don’t meet on an annual basis.
Annual budget sessions are necessary and we need to bring Arkansas up to speed with our current economic environment. One of the benefits to taxpayers in this proposal is it requires a 75 percent super-majority to extend a regular session beyond 75 days. This will virtually eliminate the old 90 day plus regular sessions that have been common in our past.
Practically no family can budget at home on a two year basis. I’ve yet to hear of a business or farm that budgets on a two year basis. Why do some think state government can work any differently ?
Eric Harris is an accountant and a state Representative in District 94.
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