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Arkansas Faces $353 Million Budget Shortfall As COVID-19 Cases Rise To 174

Nate Smith
Daniel Breen

Gov. Asa Hutchinson says the state will face a $353 million budget shortfall over the next three months as it postpones the state individual income tax filing deadline to July 15.

Hutchinson announced the postponement at a press briefing Monday, where he said the number of coronavirus cases in Arkansas has grown to 174. Hutchinson said he would call a special session of the state legislature to deal with the expected loss in state revenue.

"We will utilize and manage the unallocated surplus to accomplish the broader mission of state government, even though it's going to be a serious belt tightening time for all of state budget except for those are on the frontline of the current crisis," Hutchinson said.

The shortfall puts Arkansas in a predicament, he said, as the extended income tax deadline falls after the end of the current fiscal year on June 30. The Arkansas Constitution requires the state to present a balanced budget at a biennial fiscal session of the legislature, which is set for mid-April.

Hutchinson said that while some of the state's $173 million budget surplus from last fiscal year would go toward bridging the gap, the state's reserves cannot be depleted.

"There's also a need for that surplus for a quick response in the event that we need ventilators, in the event we need respirators, in the event we need help for our hospitals and [personal protective equipment] that's purchased," Hutchinson said. "So during this emergency time, we have to keep some of those reserves in place with a lot of flexibility for quick action to meet these needs." 

Dr. Nate Smith, secretary of the Arkansas Department of Health, said the state is ordering barbershops and hair salons to close until further notice, along with tattoo shops, nail salons and massage businesses to promote "social distancing" amid the coronavirus pandemic.

Smith said five people in Arkansas have met the criteria for recovery from COVID-19.

"The CDC criteria that we're following is seven days after the onset of symptoms, or three days since the resolution of symptoms, whichever is a longer period of time," Smith said. "So we’re using that in assessing how many of our cases have met that criteria for recovery." 

Smith said the increase with nine new confirmed cases of coronavirus from Sunday to Monday is smaller than in previous days, mainly because the Department of Health is focusing testing mainly on patients and staff at nursing homes. According to Smith, 38 people at three nursing homes in Little Rock, Centerton and Pine Bluff have tested positive for the virus.

Huthcinson said the state is ordering up to 2 million units of personal protective equipment, or PPE, from overseas suppliers. While Hutchinson announced Sunday that the federal government had granted only 25% of the state’s request for PPE from a strategic stockpile, he said Monday that percentage has increased.

Despite the strain on the state's budget, Hutchinson said he is not planning any layoffs in state government.

"It's too early to say exactly where those cuts are going to come from, but it's a lot, and we will take it a step at a time. But we're on the early stages of determining that."

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