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Wednesday, Jan. 28, 2015

State agencies begin painful process of cutting budgets

Wednesday, November 28, 2001

State agencies last week cut spending to bring their budgets into balance for the current fiscal year.The Board of Correction and Community Punishment, which oversees state prison operations, trimmed $22.3 million. The state Board of Education reduced the Public School Fund by $54 million. Officials at the state Human Services Department announced cuts in spending of $33.3 million.The cuts in Correction Department spending will affect many county jails that are housing state inmates because there is no space for them in state prison units. In mid-November there were 894 state inmates in county jails. The state is supposed to reimburse counties $28 per day per inmate for holding the prisoners, but the recent round of budget cuts means the reimbursements are on hold indefinitely.The Board of Correction also decided to postpone the opening of new prison space that would have held more than 700 inmates - 316 at the Malvern Unit and 400 at the Grimes Unit near Newport. Also, construction of 200 additional beds for women at the Wrightsville Unit will be put off until money becomes available. State prisons will use reserve funds as much as possible to maintain operations at their current level. However, Correction officials warned that the Department would not have funds to meet emergencies.Also, the Board of Correction is expected to consider granting early parole to 575 male inmates and 70 female inmates to relieve overcrowding problems. The state Board of Education voted to make cuts of more than $54 million.Individual school districts may still give teachers a $1,000 pay raise this year, but they are no longer obligated to do so. Some districts have committed to raising teacher salaries this year. Next year, however, it will be very hard to grant teachers the $2,000 raise they had expected.Raising teacher salaries by $3,000 over two years was the major budget issue of the 2001 legislative session. The economic slowdown in Arkansas has lowered tax revenue, forcing cuts and jeopardizing the teacher raises.The Human Services Department will see its state funding reduced by more than $33 million. Officials tried to avoid severe reductions in Medicaid spending, because the federal government matches state Medicaid funding on a 3-to-1 basis. The Department announced it would cut state spending on Medicaid by $12.8 million. Combined with a loss in federal funds, Medicaid spending will go down a total of $51 million. Other Human Services spending categories will decrease by $15.5 million.Also, the Department will allocate $5 million in "one time" money to continuing programs. One time money will not be available next fiscal year.About 100 layoffs within the Department were announced. Between 30 and 35 will be in administrative services, 50 will be in the Division of Developmental Disabilities and 12 layoffs will be in the Office of Systems and Technology.Even after the layoffs, Human Services will continue to be the largest single state agency, with 7,600 employees. Officials at Human Services said they may seek competitive bids for prescription drugs and psychiatric services. They also are considering paying lower reimbursements to pharmacies and tightening eligibility standards for nursing home care and children's mental health services.