Gov. Sarah Huckabee Sanders recently released her proposed balanced budget of $6.3 billion for the 2024-2025 fiscal year. This is an increase of $109.3 million or 1.76%, over her budget for the 2023-2024 fiscal year. This is the second year in a row that Gov. Sanders has proposed a budget in line with or below inflation numbers. In the release of her budget, Gov. Sanders claims this is below the recent past averages, which is true. Under Gov. Asa Hutchinson, the budget averaged an increase of around 3%, and he grew the overall budget nearly $1 billion during his two terms.
Gov. Sanders’ budget highlights reflect almost no change in executive branch spending after she instructed her cabinet secretaries to submit requests that left spending at the same rate as the prior year. The net increase is primarily due to $100 million for teachers’ pay raises (moving Arkansas to the top five in the country for starting teacher salaries) and further implementation of the Arkansas LEARNS school choice program. Additional funding for the Arkansas State Police is also included within the increase.
Gov. Sanders’ and the state legislature’s recent work on reducing waste, fraud, and abuse in the Medicaid system has also resulted in significant savings, holding the increase for Department of Human Services to 0.24%. Since the 2013 implementation of Medicaid Expansion and its continued expansion by the Hutchinson administration, the wasteful, careless spending through DHS attributed to most of the $1 billion increase mentioned above (at a time when inflation was at an all-time low.)
A balanced budget is required under the Arkansas Revenue Stabilization (RSA) law. The budget includes state general revenue dollars left over after applying non-discretionary spending items but does not include federal taxpayer dollars used by state government. Below is a breakdown of recent RSA budgets from 2010 – 2025, the dollar and percentage increases, the governor at the time, and which party controlled each chamber of the state legislature. You will see that over this 15-year period the state government budget has increased over $1.8 billion, or 40%.
Many in our state have been fighting a long, losing battle to decrease the size and growth of government in Arkansas. In 2015, Conduit for Commerce, Inc. recommended to Governor Hutchinson that he encourage the legislature to pass tax-expenditure limit that would cap increases in government spending year to year to inflation plus population growth. (A like measure had been efforted by then House Member Bruce Westerman in 2013.)
With so much uncertainty in our economic outlook, CFC renews its call for such a cap on government growth.
A function to return most of any surplus money back to taxpayers or to automatically reduce the next year’s budget or income taxes accordingly would also benefit the state and ensure the budget does not grow faster than the growth of the population and inflation rates, providing conservative budgeting and spending.
After we stop government from growing faster than our economy, we should then consider the freedoms that it would offer Arkansas citizens to reduce the size, not just the growth, of government. 
