By Senator Bryan King
The legendary rock band, the Eagles, had a top-selling song called Lying Eyes. One verse said, “You can’t hide your lying eyes.” The same could be said for Budgets. This past week, the Governor presented her “balanced” budget proposal for this next year.
First, let me clear up the first lie, “Presenting a ‘balanced’ budget.” The constitution strictly limits spending to no more revenue from taxes than it receives. This basically means, in personal terms, we cannot deficit spend and, for example, it restricts a couple making $150,000 per year from spending more than they bring in or already have in savings. In other words, no borrowing more to spend more.
The Arkansas Constitution does that. It is not accomplished by politicians like the Governor or me. A more honest term for the Governor’s “balanced” budget proposal would be “Revenue tax estimates and government spending estimates for the next fiscal year.” That would be an honest title instead of the current lying “balanced” political term.
Now on to the real and most dangerous “lying budgets” that have been passed in the prior four years and are clearly about to happen in this current fiscal year.
In real terms–how families or financially responsible budgeters or spenders do it is, let’s say, a couple makes $150,000 per year. They plan their budget on $150,000. That could include house payment, car payment, monthly expenses, property taxes (can’t forget those), health care, and home and car insurance. Let’s say that couple budgets $110,000 each year for those basic needs.
So, with $40,000 left, they budget one-time expenditures like adding on or remodeling their home or a vacation. Let’s say those one-time expenditures are $20,000. So, with $20,000 still left, that couple decides to make donations to charitable groups for $2,500 and decides to put $7,500 back into retirement or stock investments. And then they want to have some cushion and allocate $10,000 to carry over to the next year and stick in a savings account for unexpected expenses or emergencies or even future one-time allocations as mentioned above.
Now to where the Governor is pulling “lying budgets” and spending to mislead the citizens on the true budget of Arkansas.
Arkansas built up a great deal of money from the COVID funny money DC flood spending to states. One example of how that flood of debt and deficit busting worked is in the Medicaid trust fund. The Medicaid trust fund had $579 million just three short years ago. Now the Medicaid fund is drained—included in that use of funds was the bailout of the Learns program by $70 million. In fact, in the first fiscal quarter of this year, $200 million and $70 million had to be transferred from the “Restricted” Reserve COVID Funny Money Fund to cash flow spending. Don’t you love these catchy, sound-good political lying terms like restricted reserve? Sounds great, especially if you remember the Social Security “lock” box for us aged people.
There is nothing restrictive about the “Restricted” reserve fund. That fund was easily robbed by just a limited number of Legislators on a committee called Peer Review and Legislative Council.
Now the Governor and the Department of Finance and Administration boast of having $150 million above forecast, and they are doing great budgeting. They are lying!
The reality is they irresponsibly have shell-gamed $270 million in the first quarter by using one-time funds to cash-flow irresponsible spending they created. The real, honest numbers are that Arkansas is $130 million in the RED in the first quarter of this year. $270 million of one-time funds minus the $150 million above forecast equals $130 million in true numbers.
Let’s go back to the couple making $150,000 per year. For comparison, if that couple makes $150,000 and spends $200,000 (for the necessities plus more expensive cars, home furniture, vacations, and a higher lifestyle) by draining $50,000 from their savings and retirement funds, then it’s a financial disaster coming.
I am hereby sounding the alarm! In honest, true numbers, the Governor and legislators have robbed $1.3 billion in the last three short years to cover irresponsible spending and mislead the citizens.
Instead of the almost $7 billion “balanced” budget the Governor presented last week, the true budget of Arkansas is in reality almost $7.5 billion. This is an understatement of the facts by just a mere half a billion dollars more, if you used real, honest terms of spending and current income. If you used those figures, the Governor is spending a half billion dollars more than what is currently coming in.
The other part of the verse to the famous Eagles song is, “You can’t hide your lying eyes, and your smile is a faint disguise. I thought by now you should know, you can’t hide your lying eyes.”
The Governor and legislators can’t keep hiding this irresponsible spending by shell gaming and robbing one-time funds to mislead the citizens as to the real, true, honest budget of Arkansas.
The most needy in Medicaid (like the disabled -CES waiver list) and the taxpayers of Arkansas will suffer devastating consequences if this doesn’t stop immediately.
Many believe that this outrageous spending is simply in order for the Governor to dodge accountability and use the taxpayers of Arkansas as a political and personal financial steppingstone –escaping her responsibility and to literally pass the real bill to the citizens, as some see her as cashing out.
I call upon our Legislature to say “NO” and put a stop to irresponsible spending for the sake of our state. I know I plan to do my best to that end.
*These opinions are those of the author and not necessarily the publisher.
