Gov. Mike Beebe has accepted a recommendation by the Arkansas Department of Finance & Administration to cut the state budget by $100 million for the current fiscal year, according to a news release from his office.
The DFA on Tuesday reported that revenue forecast for fiscal 2010, which began July 1, was down by almost $99.9 million.
Beebe said on Monday that a decision on whether to cut the budget was imminent. The cuts come after state revenue fell $55.8 million below expectations last month.
The governor’s office said the cuts mean a 2.2 percent reduction of the overall budget, with the Departments of Correction, Community Correction and Health and the Arkansas State Police seeing the largest reductions
“Just like any family or business, state government must live within its means,” Beebe said in a news release. “Despite our conservative budgeting, it appears that our recovery from the recession has been slower than anticipated. There are still positive signs in the revenue numbers, and we maintain hope that the recovery will accelerate.”
The DFA said the decline in revenue “in all of the major revenue categories exceeded expectations in the first quarter of 2010.” The agency said forecasts signal a recovery in the second half of the fiscal year.
The governor’s office said existing fund balances “will ensure continued adequacy for public education.”
September revenue numbers came in far under expectations as income, sales and corporate tax collections dropped, according to state finance officials. Beebe asked them to consider whether the state needs to trim its fiscal-year revenue forecast.
ArkansasBusiness.com will continue to update this story.