Arkansas lawmakers will return to the State Capitol in Little Rock next Wednesday for the biennial fiscal session. Little Rock Public Radio's Politics and Government Reporter Josie Lenora spoke with News Director Daniel Breen about what to expect.
Breen: Give us an overview/explanation of what a fiscal session is.
Lenora: The legislature meets every spring to pass bills. In even-numbered years, they only meet to discuss budget bills. This is less eventful than odd-numbered years where they also discuss other types of legislation. But, sometimes budget items become unexpectedly contentious. Last fiscal session, for example, we had a prolonged debate about funding the Game and Fish Commission. Some lawmakers didn't want the commission’s director to possibly get a raise.
Breen: Do we foresee any matters of contention this year?
Lenora: Gov. Sarah Huckabee Sanders wrote a letter to state lawmakers laying out her priorities for the fiscal session. She put budget items in two categories: "must-haves" and "like-to-haves.” Her letter actually likens this to a family budget, saying “Just as a family must pay rent or utilities, so too must the state government pay employee salaries and building maintenance.” Those last items are the "must-haves." The "like-to-haves" are referred to as discretionary grants.
Breen: How much are we increasing the state budget overall?
Lenora: The governor doesn't want to increase the budget by more than 3% this year. That's more than the last fiscal session. For her proposal in 2024, the last fiscal session, she asked for a 1.76% increase.
Lenora: Devoted listeners of this station know that school choice is one of the governor's favorite issues. Three years ago, she oversaw the passage of Arkansas LEARNS, which gives tax dollars to parents to homeschool their kids, or put them in a private or religious school. This year, roughly 44,000 kids are in the program. This is the largest number of participants, by far. And the money adds up, since most kids get about $7,000 each.
Breen: And the governor has set aside millions of dollars for the program every year it has existed, right?
Lenora: Yes, the first year, 2023, cost about $297.5 million with $150 million of that being new spending. In 2024, the funding going to school vouchers went up by $65 million.
Breen: What are the figures this year?
Lenora: Last year, the legislature approved separate tranches of money; $187 million in April, $90 million in June and $32 million in January. For 2026, the voucher program alone will cost $310 million. But the law is more expensive than that. The governor's budget asks for $122 million more this year, and for an additional $70 million to be earmarked for the future.
Lenora: There is growing concern among lawmakers about whether the state budget can support the high price tag. Arkansas has ended over 20 fiscal years with surpluses. For example, the 2025 fiscal year ended with a $367.9 million surplus. Also keep in mind, Sanders is very passionate about phasing out the state income tax. So that's less money in the budget to spend on things like LEARNS.
Breen: A big controversy right now in the legislature is whether money will be allocated for a brand new prison.
Lenora: In 2023, when LEARNS was passed, the state also passed a bill to lengthen sentencing requirements for prisoners. The current prisons don't have enough room for the larger number of inmates.
Lenora: Sanders wants to build a prison in Charleston in western Arkansas. The state bought the land already for almost $3 million. The town of Charleston does not want this prison. They have been very vocal about this on the news, to lawmakers and at public town halls. Residents say they don't have the water infrastructure, they do not want to light up the land with a bright prison. I talked to several residents who say they barely have the staff for their current town workplaces let alone enough people to work at a giant prison.
Lenora: During the general session last year, the legislature tried five times to pass funding for the prison. It was a bill that would have set aside $750 million for the prison. They needed 27 votes out of 35, so three-fourths of the Senate. Every time, it failed.
Breen: That's because budget bills need a higher threshold to pass than non-budget bills, which generally need a simple majority.
Lenora: Yes. House Speaker Brian Evans was asked about the prison in an interview with the Arkansas Advocate. He said it's unlikely to come up this year. The budget the governor put forward does not mention it.
Breen: What does it mention?
Lenora: Besides the LEARNS money, she mentions pay raises for corrections officers and state troopers. That's $53.4 million. There's $6 million to higher education, $7 million to drug task forces, and $5 million for the SNAP error rate. That's because the One Big Beautiful Bill passed by Congress gives financial penalties to states who have food stamp errors. There is also $6 million for something called the 10:33 Initiative.
Breen: What's that?
Lenora: Sanders' letter calls it a “faith-based solution to end welfare dependency and move people from crisis to career.” It claims to be a stepping off point for welfare programs encouraging people to instead lean on faith-based charities. Sanders announced it five months ago with Paula White-Cain who works in the White House Faith Office. The title of the program comes from the Parable of the Good Samaritan in the Bible which is Luke 10:33.
Breen: Proposed state budgets usually include a forecast. Can you tell us about it?
Lenora: The Department of Finance offers a financial forecast for the year. The forecasts typically make conservative predictions. The forecast says they expect “slower growth in 2026 and 2027.” Meanwhile, inflation is predicted to be 3%, but it may go down to 2.5% this year.
