UPDATE: State Workers Won’t Get Pay Raises Under Beebe’s Budget Plan

LITTLE ROCK – State workers won’t get a raise next year under the budget proposal Gov. Mike Beebe sent to legislators Tuesday.

Department of Finance & Administration Director Richard Weiss presented the governor’s 2011 budget a day after the administration lopped $106 million from the current year’s budget because tax revenues have not met projections.

Weiss told Joint Budget Committee members that personal and corporate income tax revenues have fallen short, as has income from state sales taxes. However, Weiss said it appears the recovery has begun and revenues will improve over the coming 18 months.

A 2.3 percent cost-of-living raise for state workers would have cost about $20 million, while the governor has $32 million in a rainy day fund.

“He [Beebe] is trying to be very conservative and to have a little bit of flexibility out there,” Weiss said. The $32 million is what’s left after Beebe announced Monday he would use $8 million from the rainy day fund to help state human services and prisons through the latest budget cut. No layoffs will result from Monday’s budget cut.

Beebe’s budget proposal also includes a balanced budget reserve fund of $34.5 million. Any revenue that comes in above projections would flow into that fund.

Sen. Jim Luker, D-Wynne, among other legislators, complained that tax revenues that come in above projections should go into general revenue. But Weiss said the governor wants to have the reserve fund as a safety net.

Rep. Bruce Maloch, D-Magnolia, co-chairman of the Joint Budget Committee, said the budget hearing process may be wrapped up in two weeks, rather than the three weeks set aside before the session begins Feb. 8.

“I think everyone understands the budget situation we are in,” Maloch said.

The panel was scheduled to take up higher education budgets Tuesday afternoon.

(Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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