May 22, 2025
Senator Ben Gilmore Please take your seats. Good morning to everyone. It's good to see everybody here. And I'm going to call on Senator Dees to offer a prayer. Senator Dees, if you would, light up there. And you're recognized.
Senator Tyler Dees Thank you, Mr. Chair. Members, let's pray. [Prayer]
Senator Ben Gilmore All right. Thank you, Senator. All right, members, we're gonna start with item C, the approval of minutes from the last meeting. I'll entertain a motion to adopt those minutes. I have a motion. I have second, any discussion? Seeing none, all in favor say aye. Any opposed? Seeing none opposed. All right moving right on to item D. Dr. Silva, if you would please come and make your report.
Dr. Carlos Silva Thank you, Mr. Chairman.
Senator Ben Gilmore You're recognized.
Dr. Carlos Silva Thank you, Mr. Chairman. Carlos Silva, Bureau of Legislative Research. I'm your staff and today I'm talking about April 2025 monthly revenue report. As we look on page number one, we'll see gross general revenues as $6.8 billion, which is a decline of $361.5 million from year to day, 24 to 25. That's around a 5% decline.
As we move down to net general revenues, we'll have $5.4 billion. There's also a decline of $224.7 million, or around 3.9% decline there from year to day. As we move to page number two, and we'll see here, there's a change from 131.7 to 52.2 on the difference between the forecast and what we have year to date. But the agency had come up with a new forecast, so this here would not be relevant since they have a new forecast. As we move to the following pages, page number 3 to page number 5, we'll see general revenues.
And from page number five, the bottom of page number five and forward, we have special revenues. There was not much change between the last month to this month, other than that change on this forecast, which was due to the corporate and individual income tax collections that we have that declined from last month. And with that, I'll take any further questions.
Senator Ben Gilmore Thank you for your report, Dr. It looks like we have a couple of questions. Going first to Senator Hammer. You're recognized.
Senator Kim Hammer Thank you. Good morning. Thanks for the report. I'm just curious, as far as interpreting the numbers, any concern about the future with the decision for tax returns to be delayed, deferred until later this year, when the feds gave us a little latitude for that, how does that decision affect these numbers? And should we see some adjustments in the individual income tax refund? Are they related in any way, shape or form at all?
Dr. Carlos Silva So the agency has come up with a new forecast. I can talk a little bit about the forecast, but I don't know if it would be better for the agency to come up and talk a bit more since they are the one who have revised that. Other than that, I can talk about some other things that we have seen related to corporate and individual income tax. But since the forecast had come from the agency, I wonder if it's appropriate for them to.
Senator Kim Hammer Do you mind, Mr. Chair?
Senator Ben Gilmore That's fine. I also have others in the queue to ask questions. All right. Can we take these other questions?
Senator Kim Hammer Yeah.
Senator Ben Gilmore Okay. All right, I'm going now to Representative Meeks. You're recognized.
Representative Stephen Meeks Thank you, and good morning, sir. Thank you for your report. You said that the reduction has basically been due to a reduction in taxes coming in from corporate individuals. Do we know if there's something driving that in the broader economy? Is that decline expected to continue? And my part B, and this may be better for the agency, is that what is driving them to have to come out with a new forecast?
Dr. Carlos Silva Yeah, again, I'd rather defer to the agents. I can talk about after they made their statements.
Representative Stephen Meeks We'll wait for the agency then.
Senator Ben Gilmore All right. Thank you, Representative. Representative Bentley, you're recognized.
Representative Mary Bentley Thank you, Chairman. This might be for the agency as well. But I just see on page four, DFA fines, like 156% increase. What was the cause for that? It seems like a pretty excessive increase for that, for this month. So I don't know if there's one particular thing that caused that to be a 156% increase. Fines, penalties, and court costs from DFA.
Dr. Carlos Silva I'll refer to them since it's DFA.
Senator Ben Gilmore All right, Senator Rice.
Senator Terry Rice Thank you. Representative Bentley asked my question. I would like to hear from DFA and see if that's one large fine for the main part of the increase or if they're going more aggressive.
Senator Ben Gilmore Thank you, Senator, and we'll get the agency here in just one second. Senator Dismang, you're recognized.
Senator Jonathan Dismang Thank you. This is back on Representative Meeks' question. I was in the back on a phone call so i'm sorry. We did stipulate that there was a shift in revenue on income tax collections because of the federal shift on the due dates.
Dr. Carlos Silva Yes, sir.
Senator Jonathan Dismang Right? Okay. And so my response to Representative Meeks would be a substantial portion of the decrease in income tax collection is due to the shift in the due date for income taxes, not just for the tax returns themselves, but also the payments related to the tax return. We didn't need the agency to answer. But, okay, thank you.
Senator Ben Gilmore Thank you, Dr. I'm going to ask the agency to come forward. Senator Hammer, I'm going to go to you first. And members, if you have questions for the agency, I'm to ask that you get back in the queue. And Mr. Secretary, if you would identify yourself for the record and then I will open it up for questions.
Jim Hudson Jim Hudson, Secretary DFA. Good morning. Congratulations, Chairs, on your appointment. And congratulations, members, on being with ALC. Looking forward to working with you over the next biennium.
Senator Ben Gilmore Thank you, sir. Going to Senator Hammer, you're recognized.
Senator Kim Hammer Thank you. I think Senator Dismang probably addressed it, but let's just hear from you. As far as the numbers that are reflected in this report and any alarm bells that may be going off, some of this is attributed to the fact that tax due date was deferred and is having a reflection in this report. Would you just give us some assurance or just give some input as far as correlation of the two events?
Jim Hudson Yes. So Dr. Silva's report, you know, is essentially a backward looking report to see what we've done thus far in the fiscal year. Corporate collections are notoriously volatile. They're even more so, I'd say, right now, just given the number of tax cuts that we've done with some retroactive effect. So there could be a forecasting component to this. But the big thing in terms of our new forecast that we just issued, with a disaster declaration, due dates that would otherwise be occurring between now and July 31st, those have been extended to July 31.
So we have a large amount of estimated tax payments that occur June 30. And so we would expect some amount of them to be rolled into FY26 to be made at the end of July. It's not a net loss of revenue, it's just more of a timing effect of it. So we'll see some leakage of revenue both on the personal side and the corporate side out of F25 into FY26. You know, we've done some estimating on that, but we really don't know how many people will take advantage of that yet.
Senator Kim Hammer So August, September will give us a truer picture with those deadline dates expired.
Jim Hudson Yeah. And again, it's a timing issue. You know, it is not a question of we're losing revenue here. It's just going to happen in a different fiscal year now.
Senator Kim Hammer That's the important point to me.
Representative Stephen Meeks Thank you, Mr. Chairman. And I think Senator Dismang may have kind of gotten to the heart of where I was going with this. But so it sounds like since we're delaying some of these payments, the expectation is that when those dates arrive, that this shortfall, if you will, will be met. That it'll come back in line. Is that the expectation?
Jim Hudson Yes, sir. The extension did not impact revenue at all. It impacted the timing of the collection of the revenue.
Representative Stephen Meeks And then my follow-up question, you all had mentioned that you'd come out with a new forecast. Is there anything in the broader economy that's driving the need for that? You know, there's a lot of speculation about the impact of tariffs, where the economy is going. And so I just want to, A, is any of that driving the needs? And is there anything looking forward that we need to be concerned about, about revenues coming into the state?
Jim Hudson Yes, sir. So we issued a revised revenue forecast yesterday. That's required by statute. We do that third Wednesday of May per statute. So that's the reason for the timing of it. We did reduce projected revenues for FY 26 and FY 27, primarily because of economic indicators at a macro level. I provided a full copy that revenue forecast to the chairs. I'm sure at the appropriate time staff's gonna make copies of that available to y'all as well. I would encourage you to read the entire report. It has all the explanations and footnotes in about the trend factors that we use.
But to answer the specific question, I would say that the reduction that we're made to the forecast is really almost entirely driven by macroeconomic considerations. And to put a kind of distinction on this, I think it's very, very important. Tariffs are a large component to this in terms of the analysts that we track, particularly at S&P, that they are trimming their forecasted growth in GDP. But it really isn't because of the actual impact of tariffs, because there largely isn't an actual impact of tariff yet. They've been paused in many, many respects.
I think what you see working itself out right now on the market is the perception as to what the actual impact will eventually be. And if anything's really certain is that markets hate uncertainty. And so that kind of extracts a little bit of a price. I for one believe that the potential upside from tariffs could be significant for the state if all the agreements are worked out as been represented and you see in the media and we get trade agreements that on a net basis are more favorable to the United States in the future than what they are today. Okay?
And I think particularly for Arkansas, if our agri exports, we get access to certain foreign markets that we're currently closed off to, that could be a significant benefit to the state. But at this point, we don't know what the actual long-term benefits will be for it. So because of the uncertainty, analysts have reduced the projected growth. We're following suit.
Representative Stephen Meeks All right, thank you.
Senator Ben Gilmore Members, seeing no other questions. Mr. Secretary, thank you. Wait, you have one? Representative Bentley, you're recognized.
Representative Mary Bentley Thank you. Just real quick if we can figure out what the increase, the 156% increase in fines and court costs were for you guys. If you can get back to me with that. But I don't know if it's criminals or businesses or what.
Jim Hudson Yeah, I don't know what it is. We'll run it down. I do want to address, I think it was Senator Rice's question, does that represent some sort of changed enforcement posture by DFA? The answer that is no, we have not changed our enforcement posture. So there could be a combination of several cases that got resolved. We'll find out what it is and report back to you.
Senator Ben Gilmore Thank you, members. Thank you Mr. Secretary. Thank you, Dr. Members, moving right along, I will turn it over to my co-chair Representative Eaves to give the Executive Committee Subcommittee report. Representative Eaves, you're recognized.
Representative Les Eaves Thank you, Mr. Chairman. Since the beginning of the year, the Executive Subcommittee met multiple times and reports the following actions: reviewed and approved emergency rules for the Department of Corrections, the Department of Human Services, and the Department of Commerce, all of which have been reported to the members and alternates of ALC in accordance with ALC rules. We received reports and recommendations from consultants related to the procurement study, the motion picture production study, and the state property insurance study.
Approved various contracts, including contracts related to dynamic fiscal impact scoring, formation of the state captive insurance program, the procurement study, actuarial services for the Joint Retirement Committee, and actuarials services related to the EBD programs. Approved waiver requests from school districts for cooperative purchasing construction services.
So by this report the ALC co-chairs report emergency action taken on January 28th on May 6th. The emergency action reports are attached to the Executive Subcommittee report in your packet as required by ALC rule 16. In addition, the Subcommittee recommended committee fund allocations for fiscal year 2026. The recommended allocations are also included in your package. Finally, the Subcommittee voted to recommend changes to the ALC rules to the full ALC.
And those proposed changes were sent to all members and alternates of ALC via email and are attached to your report. Mr. Chair, I have two motions. I move to adopt the rules of Legislative Council and then after that motion to adopt the report.
Senator Ben Gilmore All right, let's entertain that motion. I have a motion. Have a second. Members, we will need to vote this separately by chamber per the rules. So with that, any discussion on this before we proceed to a vote? Seeing no one, all right. Director Garrity, if we would. All right, we're gonna voice vote by the House. All in favor say aye. Any opposed? So hearing none. All right. Voice vote by the Senate. All in favor, say aye. Any opposed? All right. Passes. Thank you, co-chair Eaves.
Representative Les Eaves Second motion was the motion to adopt this report.
Senator Ben Gilmore All right, I have a motion to adopt the report. I have a second. Any discussion on that motion? Hearing none, all in favor say aye. Any opposed? Ayes have it. Thank you, co-chair Eaves. All right, members, moving on to the standing subcommittees beginning with Administrative Rules. Senator Dees, you're recognized.
Senator Tyler Dees Thank you, Mr. Chair. The subcommittee met on May 21st. The subcommittee adopted its subcommittee rules and filed two reports of the Executive Subcommittee concerning its review and approval of emergency rules. The sub-committee received and filed the quarterly reports by the Department of Corrections and Post-Prison Transfer Board. The subcommittee received agency updates on outstanding rulemaking from the 2023 regular session. Four rules were pulled from consideration prior to the meeting at the agency's request, and two rules were not considered because they were held in House and Senate committees on Public Health, Welfare, and Labor for further consideration. All other rules were reviewed and approved as noted in the report. I move for adoption of the report
Senator Ben Gilmore Thank you, Senator. I have a motion. Do I have a second? Have a second. Any discussion on that motion? Seeing none, all in favor, say aye. Any opposed. Ayes have it. Thank you. Moving on to Hospital Medicaid Subcommittee. Representative Bentley or Senator English. I'm sorry.
Senator Jane English The Hospital Medicaid and Developmental Disability Study Subcommittee met on Monday to hold an organizational meeting regarding upcoming studies being conducted pursuant to Act 145 of 2025 and Act 1004 of 2025. The subcommittee also heard an update regarding reimbursement rates under the Living Choices Assisted Living Waiver from DHS. I move to approve this.
Senator Ben Gilmore I have a motion. Have a second. Any discussion on the motion? Seeing none, all in favor say aye. Any opposed. Ayes have it. Thank you. We'll go to the Peer Report. Senator Dismang, you are recognized.
Senator Jonathan Dismang Thank you, Mr. Chairman. The Peer Review Committee met on Monday, May 19th. The Subcommittee received reports, reviewed requests, and approved the following various temporary appropriation, American Rescue Plan Act Appropriation, Infrastructure, Investment, and Jobs Act appropriation, and a Restricted Reserve Transfer Fund transfer. At the proper time, I move adoption of the report. And after that vote, I will have additional motions.
Senator Ben Gilmore All right, so we have a motion. I have a second. Any discussion on that motion? Seeing none, all in favor say aye. Any opposed? All right. Ayes have it. You're recognized for your follow-up motion.
Senator Jonathan Dismang Members, A1 in your packet is a supplemental agenda item that was brought forward by Department of Health. I move to suspend the rules and take up the supplemental agenda.
Senator Ben Gilmore Thank you, members. You've heard the motion. I have a second on that motion. So all in favor for suspension of rules to take this item up, please say aye. Any opposed?
Senator Jonathan Dismang I'll give you a second to find that. I believe it's one of the last things in your packet, maybe the very last thing in your package. So, members, after Peer met on Monday, DFA sent a request by the state Board of Chiropractic Examiners for a $5,000 increase in pay plan appropriation. Matt Gilmore from the Department Health is available to take any questions on the request.
Senator Ben Gilmore Do we have any questions for the other Gilmore?
Senator Jonathan Dismang The better Gilmore.
Senator Ben Gilmore I see no one seeking recognition. We have a motion. Have a second. Any discussion? All in favor say aye. Any opposed? Thank you for sparing us bringing Matt to the table.
Senator Jonathan Dismang And that was a motion to review. Thank you.
Senator Ben Gilmore All right, moving right along. We will now hear the Review report. Senator Johnson, you're recognized.
Senator Blake Johnson Review Subcommittee met on Monday, adopted subcommittee rules and reviewed methods of finance discretionary grants request, qualifications and services contracts. All items were reviewed with one exception. The ALC Review Subcommittee adopted a motion to not review the in-state contract for Aptus Financial with the Department of Transformation Shared Services Employee Benefits Division. On page 96, you have attached packet. I move for adoption of the report.
Senator Ben Gilmore Okay, I have a motion. I have a second. Discussion, Senator Hester.
Senator Bart Hester Yeah, on the item that was not reviewed. After much discussion with House members and some senators, I don't know how exactly to do this, but I would like to send that item to Personnel for a full vetting in June. I think it's a bigger issue than maybe it's been given. So I'm not sure how to do that. I think we have some agreement to do that.
Senator Ben Gilmore It sounds like I'm hearing a substitute motion so review the items with the exception of sending that to Personnel. Is that the motion, senator?
Senator Bart Hester That's correct.
Senator Blake Johnson Do you want me to adopt my motion to include that.
Senator Ben Gilmore That would be better.
Senator Ben Gilmore If you're so inclined, Senator.
Senator Blake Johnson So with an adoption to send that Aptus financial contract to Personnel in June. With that adoption, I move for adoption of the report.
Senator Ben Gilmore Thank you, Senator. So we're clear, members, that's the Review agenda, with the exception of that one item will be sent to Personnel. That's the motion. Do I have a second? I have a second. Any discussion on that? All right, seeing no discussion, all in favor say aye. Any opposed? Ayes have it. Thank you. Moving right along to the State Insurance Programs Oversight Subcommittee. I think that is Senator Hickey. You're recognized, sir.
Senator Jimmy Hickey. Thank you, Mr. Chair. The State Insurance Program Oversight Subcommittee met on Tuesday, May 20, 2025. The Subcommittee adopted subcommittee rules. The subcommittee reviewed and approved the Employee Benefits Division drug formulary reports for April and May of 2025 and medical drug recommendations for May of 2025. I move for adoption of the report.
Senator Ben Gilmore Thank you, senator. I have a motion. I have a second. Any discussion? Seeing none, all in favor say aye. Any opposed? Ayes have it. Thank you. Moving on to the Personnel report. I think that's gonna be Representative Warren. You're recognized. If you would, hit that again, sir. You're recognized.
Representative Les Warren Thank you, Mr. Chair. The Personnel Subcommittee met on Tuesday, May 20th, and approved the items one and two on the report. These were the Subcommittee rules and a revision to the special compensation awards and recruitment incentives plan for the Department of Public Safety. The committee also heard a presentation from the Office of Personnel Management and staff regarding procedures and typical requests to the committee. I'll be glad to take any questions and move adoption for the report at the proper time.
Senator Ben Gilmore All right, I have a motion and I have a second. Any discussion? Seeing none, all in favor say aye. Any opposed. Ayes have it. Thank you. All right, members, we're going to move on to item H. And this is going to be the reports. I'm going to ask you to look through that, see if you have any questions. There are some that were some that require action and I will go through those as we get there.
So on item H, Number 1 there under item H, we have a motion to refer to the Senate Committee on Children and Youth and the House interim committee on aging Children, Youth and Legislative Affairs. So do I have a motion to do that? I have a motion. I have a second. Any discussion? Seeing none, all in favor, say aye. Any opposed? All right.
The next item under communications would be item number 5. We have the Arkansas Public Employees Retirement System. That is a review of investment summaries. I need a motion to file as reviewed. I have a motion. I have second. Any discussion on that motion? Seeing none, all in favor say aye. Any opposed? Ayes have it. Thank you. Moving right along.
Under item six, we have the request for Legislative Council review under the teacher retirement system. I need a motion to file as reviewed. I have motion. Do I have a second? I have a second. Any discussion? Seeing none, all in favor say aye. Members again, look at those reports. If you see something you want to ask a question on. If not, we're going to go on down to item number 10, Arkansas Insurance Department. I think we have people here if members need to ask questions or want to hear that presentation. If not, I will just move forward. Thank you.
And then on the back page-- where are we here? Under item J, we have some interim study proposals. Alright so under item 1 of J, we have a motion to refer ISP 2025-004 to the House Agriculture, Forestry and Economic Development Committee. Do I have a motion? I have motion. Do I have second? Any discussion? Seeing none, all in favor say aye. Any opposed? The one no is noted. Number 2, under that, I think maybe we were passing over this until next month. Is that correct, Representative Hawk? Thank you, sir.
All right, members, then we will go to item number 3. I have a motion to refer that interim study committee to House Education committee. I have a motion. I have a second. Any discussion on that motion? All right. Hearing none, all in favor say aye. Any opposed? Ayes have it. All right. I think that's it, members.
Just a couple of things. When you walked in, you should have received a personalized thumb drive that is a PowerPoint for your use and includes a summary of some of the bigger acts that were passed this session. And it's useful for use in your communities as you talk about the session. In addition to that, there'll be an email that'll go out with all of that in a summary as well. If you have any questions, please see Director Garrity.
And then I think at this point, seeing no further business, I'm going to say I look forward to working with all of you over the coming months. And if I can be of help to you, please don't hesitate. I know myself and co-chair Eaves are happy to entertain any questions you have or any help we can provide. So, with that, members, we are adjourned.
