March 4: Joint Budget Committee

Senator Jonathan Dismang All right, members, grab your seats. Last chance. Grab your seats. With that, chair sees a quorum. We’re going to get started. Hey, for those in the audience, I appreciate the camaraderie. If you need to go outside to have those conversations, go ahead and take them on outside. Members of the audience, I’m going to start calling you out by names. 

Let’s wrap up the conversations or go outside. For every minute that you all delay and continue the conversations, we’ll make sure to identify who you are and we’ll add a little time to the Q&A section for you all today. 

Alright members, first thing we have is consideration of JBC rules. These are rules that are compiled, or any changes are the result of legislation and then created by staff. With that, I’d be happy to take any questions on Section B, the rules and those changes. Senator Hickey, you’re recognized for a question on the rule changes. 

Senator Jimmy Hickey I just have not had a chance to totally look over this. Could staff weigh in if there’s any substantial changes in here? I’m trying to look. 

Wendy Cartwright Thank you, Mr. Chair. Wendy Cartwright, BLR. Senator Hickey, all of the rule changes, all of these revisions are due to acts passed in the 2025 legislative session. So these rules are just being revised to match the legislation that was passed. 

Senator Jonathan Dismang Thank you, ma’am. All right, thank you. Members, do we have any other questions? All right, seeing no questions, we have a motion to adopt. Senator Bryant has made a motion to adopt. We’ve got a second by Representative Wooten. All those in favor, signify by saying aye. All those opposed? Motion carries. 

We’re going to move on to the balanced budget presentation. And if y’all could make your way forward. If you’ll give us just a second, Secretary, they’re going to hand out a copy. And they’re doing that now. Members, while they’re handing it out, I just want to make sure we’re all on the same page. This will be the presentation by DFA for the balanced budget proposal by the governor. There is no action we will be taking today. 

There will be no action that we’re taking today. We’ll have until the start of the session to digest this, formulate our questions, get our understanding and see if there’s an agreement with the legislature on how we move forward. But again, we will not be taking any action today. All right, has everybody received a copy? Looks like we just got a couple more. All right, with that, you’re recognized to present. 

Jim Hudson Good morning, Mr. Chairman. Good morning committee. Jim Hudson, Secretary DFA. 

Jessica Moore Good morning. Jessica Moore, DFA budget. 

Governor’s Balanced Budget Proposal

Jim Hudson Just real quickly on Jessica Moore. You probably have not had a chance to meet her yet. She’s leading up the budget team at DFA. She is well versed in all the numbers. And so when I stumble, she will help me up here today. But she’s just a great member of our team. I’m just glad to have her at the table with me. 

The letter that you have from the governor summarizes her proposed balanced budget. She does an exceptional job communicating her priorities in the budget. I’m not going to read the letter to you. I’m going to read the RSA to you and I’m going to hit a few high points just so you understand kind of what we’re emphasizing in this next budget. Really, when the governor was instructing us to begin building the budget, the proposed budget, you have three priorities that she was focused on.

 First, continuing her emphasis on holding down the growth in state government. Focus on continuing to invest in some of the priorities that she’s been encouraging us to invest in, especially in education, since the beginning of her term as governor. 

And thirdly, to focus on continuing to make progress, real progress, consistent progress in cutting our income taxes and getting us to a place where we’re at zero, hopefully as soon as we can. Those are three things that she asked us to look at and that’s how we built the budget. 

Let me hit for you just kind of the high points of what’s in the RSA. First of all, it’s a 3% increase year over year. That’s pretty much consistent with the historical average of what RSA increases are. In terms of the larger, I guess, increase amounts, would be in EFAs. We’re adding $122 million to the EFA line item in the RSA. This fully accounts for the one-time monies that we transferred in FY26. 

I think when we’ve been speaking about the EFAs and we’ve been at the table during the interim period, we’ve been very clear that one time monies would make their way into the RSA. And we’re following through on that commitment. We have 44,000 students who are benefiting from EFAs now and we want to make sure that that is adequately funded. 

We have earmarked or recommended that we earmark $70 million in a one time set aside to fund any increase in the growth of EFAs in FY27. Just as we’re doing now, if there’s any actual usage to the degree that we use that set aside in FY27, it will be added to the RSA for FY28. So we’re fully accounting for and reflecting in the budget the cost of that program. In addition to EFAs, we have money set aside for the pay plan. 

$54 million that will be going to Corrections, DPS and Ag. This is to account for the cost of the new pay plan that was implemented last summer. These agencies have received performance funding year to date. They will receive probably a little bit more as we end up the fiscal year. We want to make sure that whatever performance funding that an agency actually receives gets allocated to the RSA for next year. 

So we’re fully accounting for that cost. We also have $6 million that’s going in for new funding for higher education through the productivity formula. We have $7 million in new money for the drug task forces. We have $5 million in additional money for the DOC, Department of Corrections medical contract. This is a part of the existing contract. It is a built-in increase that’s already there. We’re just funding it. 

We’re also adding $6 million to the Governor’s 1033 initiative. 1033 refers to Luke 10:33. It’s the parable of the Good Samaritan. That program is focused on government partnering with the faith community and with community-based non-profits to help Arkansans move from a place of dependency to productivity from places where they’re on welfare to where they’re having a job. This is an initiative that we’ve seen already bear fruit, and the governor wants to allocate more resources to it so we can help more Arkansans. 

We’re also adding $5 million to the Inspector General’s budget. This additional $5 billion will be really to support addressing our SNAP error rate. For those of you who recall, the One Big Beautiful Bill that was passed last summer, the degree to which we have a SNAP error rate will affect the cost sharing that the state has in the future. 

So to the extent that we can drive that error rate down, it will benefit the state financially. So the inspector general will take point on this. They’ll collaborate with DHS in coming up with a way to reduce our SNAP error rate. 

And then we’re also adding an additional $100 million to Medicaid sustainability. This $100 million will be on top of the $100 million that we’ve already allocated in a set-aside that can be used just to support the Medicaid Trust Fund and protect the Arkansans who are most vulnerable. So those are the additions to the RSA going into FY27. 

But let me just circle back and talk about tax cuts and the importance of making sure that we’re prioritizing tax cuts. All Arkansans, when they approach their household budget, they prioritize their spending. There is some spending that’s more important than other spending. Currently in our budget, I think we have just one category of spending. We’re saying more or less that all spending is of equal importance. We know that’s not the case. 

So we are reintroducing a concept that we’ve used historically here at the General Assembly, which is categories of funding, Category A funding and Category B funding. Category A funding will represent about 93% on average of an agency’s RSA allocation for FY27. Think of it as those recurring monthly expenses like payroll, like the light bill, like paying rent. They get that money every single month. 

The 7% that’s remaining, think of that as more like one-time expenses that can be deferred if we have the money to pay for it. So it’s a way of prioritizing our budget, having A categories and B categories. We think when we do this, then we have more opportunity to manage the growth of our budget so that we can begin to prioritize cutting taxes. We don’t want the tax cut conversation to be an afterthought, that we will cut taxes if we have enough money to cut taxes.

 Prioritize how we’re allocating the money so that we can cut taxes. That’s the approach the governor’s had with the budget. And with that, Mr. Chairman, I’ll be happy to take any questions. 

Senator Jonathan Dismang All right. Thank you, Mr. Secretary. With that, Representative Rye, you’re recognized for a question. 

Representative Johnny Rye Yes, sir. Thank you, Mr. Chairman. Mr. Hudson, question for you, sir. On the decrease in income taxes at one-half of a percent and maybe even looking at 1 percent, do you have any figures on that, sir, of how much that will cost? 

Jim Hudson So generally, for each 1/10th of a percent in reducing income taxes, if you also include the pass-through entity tax, it’s about $58 million per 1/10th of the reduction. 

Representative Johnny Rye So it’d be about $250 million for a half-cent, something like that. 

Jim Hudson If you did, like 5 percent, 5/10ths cut, yes sir. 

Representative Johnny Rye Thank you, Mr. Chair. 

Senator Jonathan Dismang Thank you. All right. Representative Wooten, you’re recognized for a question. 

EFAs and Education

Representative Jim Wooten Thank you, Mr. Chairman. Mr. Hudson, on the balanced budget, isn’t that a requirement of the Constitution? 

Jim Hudson It is a requirement that we present a balanced budget. 

Representative Jim Wooten So the governor has to do that? 

Jim Hudson And you have to approve a balanced budget.

Representative Jim Wooten So one more question. I didn’t hear it. Maybe you said. But you used the word education. And then you spoke about– did you mention public education? 

Jim Hudson I didn’t mention public education, no sir, in my remarks. 

Representative Jim Wooten Are they getting any more money? 

Jim Hudson The public school trust, the productivity that’s there, that’s how they’re funded, not in the RSA. Not additional money in the RSA. 

Representative Jim Wooten There’s no new money in the RSA? 

Jim Hudson There is new money in the RSA. 

Representative Jim Wooten Not for public education. 

Jim Hudson Again, we know we have ample funding– 

Representative Jim Wooten I know what we have in reserves, but we can’t continue to live off our reserves. So there’s no new money for education, for public education? 

Jim Hudson Sir, the adequacy fund–

Representative Jim Wooten There’s no– there’s no new money. Would you just answer the question? 

Jim Hudson I will not agree with how you’re phrasing the question. No, sir. I’m sorry, I can’t agree with that. 

Representative Jim Wooten You can’t? You can’t do what? 

Jim Hudson I can’t agree with how you’re phrasing the question. No, sir. 

Representative Jim Wooten You can’t? Well, okay. Then we’re turning our back on public education. Is that correct? 

Jim Hudson No, sir, that is not correct. 

Representative Jim Wooten Well, that’s what it sounds like. 

Jim Hudson Sir, I can’t control how you think it sounds. 

Representative Jim Wooten Thank you, Mr. Hudson. 

Jim Hudson Yes, sir. 

Senator Jonathan Dismang Thank you. Members, any other questions? Senator Davis, you’re recognized for your question. 

Senator Breanne Davis Thank you, Mr. Chair. Does someone have the exact percentage of increase that we increased per pupil funding for schools? Because every year we have been increasing school funding per pupil, and we’ve been giving historic increases year after year. I think it’s somewhere around 3.2%. But do we have that number exactly? Because we are increasing this year, in fact, a larger percentage than we’ve increased in years past. 

Jim Hudson We’re spending more now than we ever have, yes, absolutely, on a per-pupil basis. 

Senator Breanne Davis And they’re getting an increase this year in per pupil funding, and it’s somewhere around 3%. I just wanted somebody to clarify that to make sure that that’s not printed in the paper anywhere that we’re not supporting public schools, as we’re giving them historic increases like we’re doing again this year. 

Jim Hudson And the adequacy fund is growing. We’ll actually have more in the adequacy fund at the end of the year than we have right now. So the idea that we’re spending that down is incorrect. 

Senator Jonathan Dismang Alright, thank you. Senator Hickey, you’re recognized for your question. 

Medicaid Trust Fund

Senator Jimmy Hickey Thank you, sir. Thank you Mr. Hudson. Just I want to make sure that I fully understand what you said on the Medicaid Trust Fund. You know, that’s been something that we’ve all kind of been watching over and understand how big that number is. So we’ve been spending the Medicaid Trust Fund down. 

The way that we talked about that two years ago was at 600 million. And I remember at the last meeting, it’s 300 million plus, 390 maybe. So have we, and I think I’ve been asking this, have we established a floor on how much we’re looking to keep in that account? The 100 million that we’ve got in a set aside now, are we planning on using that in this fiscal year? And then I heard you say something about another 100 million, I thought, in the next fiscal year also. 

Jim Hudson Yes, sir. 

Senator Jimmy Hickey So I want to make sure I fully understand. Are we talking about the same 100 or a different 100 or what? Give me the full specifics, please, sir. 

Jim Hudson It is an additional 100. So we’d have a total of $200 million in set-asides available to go into the Medicaid Trust Fund in FY27. I do not expect that we’ll move any money into that in FY26 in the remainder of the year. I just don’t expect that. I do expect at least half of that, perhaps more, will go into the Trust Fund in FY27. 

Senator Jimmy Hickey So what you’re telling me is that you think– and I apologize. I hate to say this without my numbers. If we were at 390 as of seven months ending, or whatever it was– what you’re saying is that you think that the 390 is going to be sufficient. But is it our intention to pay all the way down to zero there, sir? So how much more in this fiscal year do we think we’re actually going to spend out of the Medicaid Trust Fund? Or do you know? 

Jim Hudson I believe Secretary Mann, when she was at the table at the last ALC, gave a range of a number of 150 to 200, if I recall that correctly. I think that’s probably still within the range of what we’re in the year. And I think anything that gets below 200 on a sustained basis, we ought to look at injecting capital at that point. 

Senator Jimmy Hickey One last question, and maybe this is a question for the agency whenever they get down there. And not that she needs to come now, but just to be prepared. So my question is, though, we’re not holding anything over or using a timing thing to make sure that we’re going to stay at 150 million. 

And then come July 2, we automatically just immediately need a huge part of this $200 million that we are going to have in the set aside. So that’s probably a question for the agency. But I just want to make sure that we’re specific there because this Medicaid Trust Fund, like I say, we’re not talking about $3 million or $4 million, which is still big money. We’re talking about hundreds. And that’s very worrisome to me. 

Jim Hudson Yes, sir. Senator, the Medicaid Trust Fund, the first report that I get every single week is what’s the balance in the Medicaid Trust Fund. So it is something we watch. Secretary Mann and I have a close working relationship. We talk about that often. I think we’re on the same page. 

I can assure everybody we’re not using extraordinary measures to stretch payments. We’re not holding invoices. We are paying things as they come to us. And they disburse on a weekly basis. We model that out. And the last thing that we want to have is some liquidity issue with Medicaid Trust. That’s just not going to be something we’re going to allow to happen. 

Senator Jimmy Hickey Thank you, Mr. President. Yes, sir. 

Senator Jonathan Dismang All right. Thank you. I’m going to try to make sure we go to members first. But I’m going to mess that up, I think. All right, Representative Collins, you’re recognized. 

EFAs continued

Representative Andrew Collins Thank you, Mr. Chair. So Mr. Secretary, I’m just trying to make sure I understand this right. So this 70 million is being set aside from fiscal 26 surplus that’s projected for the EFAs. And that’s in addition to the 122 million in fiscal 27. That’s what we’re talking about there, as far as this separate line item for the 70 million. 

Jim Hudson The 70 million is a contingency that would come from surplus. It is accounted for, though, in the RSA. We have sufficient RSA projected for FY27 to fully fund that amount. It is really there for the growth in EFAs, more organic growth than anything else that will be occurring in FY27. 

We don’t know what the exact number is going to be. We think that’s an adequate number. But we’ll have that number there to fund that growth on a one-time, one-year basis. And then as I said, just as we’re doing now, whatever we actually use for EFAs in FY27 will get built into the RSA for FY28. 

Representative Andrew Collins Okay, and so this, if used, 192 million, is in addition to what? What is the number that would be added to form a total that we’re spending on the EFAs? 

Jim Hudson So we’re adding the 122 to the RSA allocation for FY26. That would bring the RSA allocation for EFAs for FY27 to roughly $309 million. 

Representative Andrew Collins Okay. And then the 70 would take it to 380 or 379 million? 

Jim Hudson If it’s fully used, 

Senator Jonathan Dismang All right. Senator Tucker, I think you were on and off. So you’re recognized for a question. 

Senator Clarke Tucker Secretary, those were really my exact questions that Representative Collins just asked. I was wondering what the total number was for EFAs. And I guess you mentioned that the 70 million will be in RSA, but is it still one-time money though. Or is it? 

Jim Hudson It’s not in the RSA. It’s a set-aside. My point is that in terms of the cash flow that we will generate through the forecast, revenues coming in are more than sufficient to cover what’s actually in the RSA plus the one-time set asides both for EFAs and for Medicaid.

Senator Clarke Tucker All right, it’s $309 in the budget plus the $70 million in the one time period? 

Jim Hudson Yes, sir. You got it right. 

Senator Clarke Tucker Thank you. 

Senator Jonathan Dismang All right, Senator Irvin, you’re going to ask a question. Or not, hold on. 

Senator Missy Irvin Thank you. Thank you, Mr. Chair. So I just wanted to do a little bit deeper, deeper dive. You said that we were actually going to have more funds in the adequacy account. On page 5 of what you submitted to us under the educational adequacy fund, there’s different taxes, obviously, that through legislative action we have directed towards that fund. 

And so I’m just curious, do you see a correlation which of those have we seen more of an increase in? And I’m just curious if there’s a correlation between us cutting income taxes, generating more income into people’s pockets, which has increased our revenue and sales tax, which is part of the educational, the adequacy fund. 

I’m looking for where we’re seeing growth in that as relates to these legislative direction of these taxes, or if it’s corporate franchise taxes, or if it’s really that sales tax. 

Jim Hudson It’s sales tax, ma’am. I think our estimate for adequacy for FY27, we’re estimating to distribute roughly $500 million for FY27 to the adequacy fund. 

Senator Missy Irvin So in my mind, we’re on the right track on tax policy because we’re cutting income taxes, which is putting money back in people’s pockets. And they’re spending more money, which then we’re seeing on the flip side of increased revenue through sales taxes, which a portion of this goes directly to the educational adequacy fund. And by law and by court order, we must provide adequate education, period. That’s not a subjective approach. That’s a very objective form of law that we have to provide. 

Jim Hudson Sales taxes are generally speaking a much more predictable and consistent source of revenue that we have modeled out over time. Corporate income taxes, there’s much more volatility in that. So that, again, the funding for this is way more skewed toward funding from sales tax. 

Senator Missy Irvin Perfect. Thank you. I appreciate it. 

Senator Jonathan Dismang All right, thank you. Our last question. Representative Rye, you’re recognized. 

Representative Johnny Rye Yes sir. Thank you, Mr. Chairman. Mr. Hudson, in the last couple of months, we’ve been going over this. I just kind of wondered the situation with the federal in 2028 actually is going to change their amount that they’re sending us and we’re going to have to come up with more money on our level. Do you happen to have a figure, sir, for how much that’s going to cost? I know it’s out there just a little bit, but what will that cost us? 

Jim Hudson For which program are you referring to? 

Representative Johnny Rye Well, Medicaid, Medicaid. 

Jim Hudson Well, on the Medicaid side of things, actually beginning this October, the federal reimbursement rate is going to increase. So the amount of federal funds that we get will go up. So it’ll be a little bit better situation for us in terms of our income side of things next fiscal year than what it is this fiscal year. That’s part of what we’re modeling, in terms of looking at our adequacy of the Medicaid Trust Fund. 

SNAP Error rate costs

Representative Johnny Rye Yes, sir, Mr. Hudson. But what I was wondering, sir, like the 70-30, and some are 80-20– that it was mentioned in the last couple of months that actually, our part will go up in that. 

Jim Hudson I believe you’re referring to SNAP? 

Representative Johnny Rye That’s right. 

Jim Hudson Yes, sir. So the amount of administrative expenses that we pay for SNAP go from the 50-50 share to we’re paying 75% of the share. We think the cost for that– and you can ask the DHS folks who are at the table in a couple of days– the cost us in FY27 on that increase is about $18 million, I believe. 

Representative Johnny Rye How much, sir? 

Jim Hudson $18 million additional expense. 

Representative Johnny Rye Thank you, Mr. Chairman. 

Senator Jonathan Dismang All right. Thank you, members. And thank you for your presentation. Members, I’d encourage you if you got questions, you’ve got a little more time to digest. And we’ve got a little bit of time before we get into the session. 

Make sure you meet with the governor’s staff and try to get those questions answered and make sure you have a good general understanding of what’s being proposed so that we can efficiently take care of it when we get into session. With that, Dr. Warden, you’re recognized for a presentation– or overview, I should say. 

Higher Education Budget

Ken Warden Good morning, all. Ken Warden, Commissioner of Arkansas Division of Higher Education. 

Nick Fuller Nick Fuller with the Division of Higher Education. 

Ken Warden Thank you all for the opportunity to speak this morning. We’re pleased to say that overall, the institutions of higher education across the state were 2.61% more productive than last year. That’s good news for us. 

We need more Arkansans taking advantage of the opportunities we have in higher ed and educating our workforce and seeing more opportunities for themselves in our state. We saw exceptional growth, particularly in concurrent credit over the past year. 

Our budget recommendation reflects the statutory required productivity funding formula. It was received and approved by our coordinating board in October. And we are happy to answer any questions you may have regarding the budget. 

Senator Jonathan Dismang Alright, thank you. Members, do we have any questions? All right, Senator Tucker, you’re recognized for a question. 

Senator Clarke Tucker Thank you, Mr. Chair. Thank you, gentlemen. I just noticed that UA Little Rock is getting about $1.5 million less than the year before. I’m curious about that. 

Ken Warden So the recommendation is based on overall productivity. Nick, would you like to give more details? 

Nick Fuller If you look on the attachment E, there should be a handout of that productivity index. For UA Little Rock, they were down in productivity for the year. They were down 5.96%. So with that reduction, they lost 2% of their funding due to that productivity decline. So that million dollars is that 2% reduction.  

Senator Clarke Tucker And that would be the same for the other institutions like UCA, for example? 

Nick Fuller Yes, they’re all based on how much their productivity either increased or decreased. 

Senator Jonathan Dismang All right. Representative Richmond, you’re recognized for a question. 

Representative Marcus Richmond Thank you, Mr. Chair. I’m over here to your right. Way over here. Just a request in that, I don’t know if you’re running low on ink or paper or whatever, but can you make this with a little more size to it next time so I don’t have to use my phone magnifying glass to actually see what the heck it is I’m looking at? 

Senator Jonathan Dismang Representative, that’s going to be on– Can y’all work on the font a little bit?

Ken Warden Yes, sir. We’re happy to address this concern. 

Representative Marcus Richmond It makes me think that you’re trying to hide something in this. 

Nick Fuller We’ll invest in legal sized paper. 

Ken Warden I appreciate the concern. I have it myself. 

Senator Jonathan Dismang All right, Representative McCullough. 

Productivity Formula

Representative Tippi McCullough Thank you, Mr. Chair. Could you guys explain the formula to me about the low productivity that you were mentioning when asked about UALR and other schools? 

Ken Warden So our productivity funding formula–

Nick Fuller How long do you have? 

Representative Tippi McCullough All day.

Ken Warden I’ll try to be brief. So we have a productivity formula. And what it does is it measures certificates and degrees that institutions produce. And there are multipliers for two-year and four-year in different ways due to their mission. 

And there some things where they get points for underserved folks and different things, for lack of a better word, brownie points for different things that they do along the way. And that results in an index. And the index is measured year over year, and it’s based on a three-year rolling average. 

So the past three years were compared to the three years before that, and they are compared to themselves to see if they produce more or less certificates and then based on their index, certificates of degrees, based on the index with those multipliers. 

And so if they went down the three years that we measured most recently, their index number was lower than the three years before. And there is a guardrail of up or down 2% in the base of the formula. So that’s, in a very simple fashion, the way that we get to the number. 

Senator Jonathan Dismang All right, thank you. Representative Wooten, you’re recognized for a question. 

Representative Jim Wooten Thank you, Mr. Chairman. Mr. Warden, on the budget, you have a total of 6.5 on the last page, and 93 million or 93,000 in the B category. A is 600.595, 6.595. And then you have 93 in the category B. So does that mean that you’re going to receive A, and we’re hoping that B is funded? 

Ken Warden Yes, sir. I think that’s going to be a result of this process over the next month and this session on how we get to the Revenue Stabilization Act. 

Representative Jim Wooten Let’s say because of the war in Iran and other things that we have an economic slump. And we only fund A, so actually you’re receiving less money, 300 million less money. Is that correct? 

Nick Fuller Yes sir, I believe that would be anyone on the RSA that has money in Category B. So it wouldn’t be specific to the institutions. 

Representative Jim Wooten Say that again. 

Nick Fuller I believe anyone with the funding in Category B would fall under that, not just our institutions. That if we’re not able to fund Category D, we would not get that funding. 

Representative Jim Wooten So you have to fund B to get an adequate amount of what you’re budgeting for, is that correct? 

Nick Fuller I don’t know that adequate would be the word for it. It would be to meet the full recommendation of the productivity formula. 

Representative Jim Wooten Well, to get the full recommendation that you have, you’d have to fund A and B. 

Nick Fuller Yes, sir. 

Representative Jim Wooten And how much of an increase is that for higher education? 

Nick Fuller It is a 2% increase. 

Representative Jim Wooten A 2%? 

Nick Fuller Yes, sir. We are restricted on those recommendations for productivity. We’d only request 2%. 

Representative Jim Wooten Is that new money or is that money that’s being shifted around within the reserve fund? 

Nick Fuller There is a portion of that that is new money. That is the 6 million that Secretary Hudson mentioned earlier that’s included in the budget, and then the rest of it comes from money reallocated. 

Senator Jonathan Dismang All right. Thank you. Representative Richardson, you’re recognized for a question. Nope. It’s not wanting to let me recognize you. 

Representative Scott Richardson Thank you, Mr. Chair. Dr. Warden, thanks for being here. Appreciate it. Just a quick question on what Representative McCollough had asked a little bit ago around the specifics of this formula that you have. You spoke about brownie point types of influencers. What kinds of things are they and what kind of percentage points are we talking about that would potentially influence? 

Ken Warden So they’re a multiplier. And it’s based on statutory requirements for institutions who address under-academically prepared students and underserved populations. But it’s in the law that we follow those and work those into the formula. And it’s been the same since 2017, I think. 

Nick Fuller So there are also multipliers for high demand field degrees. So STEM degrees, STEM degrees as well that are incentivized. 

Representative Scott Richardson So, offering more of these degree types or having more students participate in those degree types and making progress will help their overall multiplier? 

Nick Fuller Yes. 

Representative Scott Richardson Great. Also, I noticed that my alma mater, Arkansas Tech, got a nice bump this year, so that’s good news. I appreciate you being here. 

Senator Jonathan Dismang All right, thank you. Representative Collins, you’re recognized for a question. 

Representative Andrew Collins Thank you, Mr. Chair. So my understanding is that following the Arkansas ACCESS Act, there was something in that bill saying that we would revisit the productivity formula. And I also understand that there’s a group working on that that’s been formed. Can you tell me the composition of that group and specifically with all of these UAs that we have here, how many representatives from the UA system are in that group? 

Ken Warden So I don’t have the list in front of me. The list is comprised of presidents and chancellors and of the representative institutions that represent both systems and the independents that are publicly funded, or all the publicly funded institutions. You’re talking about the return on investment metric that we put into the productivity formula last session. That metric does not apply to this formula. 

It will be applied in the coming year. Because when you change how people are remunerated, they tend to adapt to the activity that is reinforced or rewarded in the formula. So we didn’t feel it was– we can’t change or shouldn’t change horses in midstream and when people are behaving a certain way based on something and then change their funding. 

So we have gone through the process. We’re not all the way through to embed a metric that says that if an institution is offering a degree and that degree does not show demonstrable return on investment by wage growth, then the taxpayers of Arkansas won’t consider that degree in the formula. 

So we look, which is part and parcel of what we want to do to guarantee that students that engage in higher education are as close as we can guarantee to have more opportunity than they had before they came to our campuses. Does that make sense sir? 

Representative Andrew Collins It makes some sense. I appreciate that. I guess what I’m getting at, though, is you’ve got a group and maybe it’s the ROI aspect of the formula, not overall, but the point still stands. 

You’ve got a lot of different UAs all over the state. You’ve got UA Fayetteville. You’ve got two years. You’ve got four years in all kinds of rural versus urban areas, different needs. I feel like you might want to have more representation from the UA system in that group. 

If it’s just the one system president is at that table getting this formula together, I don’t know how they can manage all of those different UAs with different interests and different incentives and represent them all as fully as they need to. 

Nick Fuller Yes sir, and there are some CFOs and some data people that are on that committee as well from the different institutions. I think there are 11 or 12 on the whole committee that are reviewing and there may be three or four that are from the UA system, from the various either two year or four year or the system. All the different aspects are covered, making sure we’re reaching every type of college or institution that we may have. 

Ken Warden We did our best to make sure it’s a representative sample. And to my knowledge, the UA system is appreciative of the representation and fine with how they’re being represented to that process now. 

Representative Andrew Collins I have no doubt. Thank you. 

Senator Jonathan Dismang All right, Representative McCullough. 

Representative Tippi McCullough Thank you, Mr. Chair. I wanted to ask a few questions about the two-year colleges specifically because we do have a wide range, like all of our colleges, of size, number of students, buildings to maintain, new buildings that are needed to be built. Is there a specific way that you divide those up, as far as state funding goes, that small ones get a certain amount, large ones get a certain amount? Can you kind of tell me a little bit about that? 

Nick Fuller There’s not a specific dollar amount. But within the funding formula, there is an adjustment on the two year side for what we call diseconomies of scale to account for those larger institutions compared to the smaller size of the two-year campuses. So there is adjustment made to their point totals in that index based on that. There’s a tier system for that. 

Senator Jonathan Dismang All right, thank you. Representative Wooten, you’re recognized for a question. 

Representative Jim Wooten Thank you, Mr. Chairman. Mr. Warden, it’s been in the news recently that the University of Fayetteville is putting $14 million into the athletic fund. Is that correct? And where is that in the budget? 

Nick Fuller We would not have the information on that funding yet, as they don’t submit their athletic budgets to us until later in the year. But the school is here if you would like to ask them.

Representative Jim Wooten You mean they’re spending $14 million and it’s not in the budget? 

Nick Fuller It would be in their budget, yes. But I would have to let the institution speak to that. 

Representative Jim Wooten Are they here? 

Nick Fuller Yes, they are here. 

Representative Jim Wooten Could they come forward, Mr. Chairman? 

Senator Jonathan Dismang That they will when we get to them in the agenda. All right, next up, Representative Garner, you’re recognized for a question. 

Representative Denise Garner Thank you, Mr. Chair, and I’ll be quick with this one. There are three things on the spreadsheet that have changed in percentage by 50%, and one at 150%. Could you just go through those three real quickly and tell us why? 

Nick Fuller Which spreadsheet?

Representative Denise Garner The summary of institutions of higher ed. So the School of Math and Science. 

Senator Jonathan Dismang Representative, which section are you on? 

Representative Denise Garner F. 

Senator Jonathan Dismang Okay, we’re on– yeah, we’re on D right now. 

Representative Denise Garner Okay, sorry. 

Senator Jonathan Dismang We kind of moved over into an E. 

Representative Denise Garner Sorry. I thought we were doing it all. Thank you. I’ll come back. 

Senator Jonathan Dismang I like your idea 

Representative Denise Garner We’ll come back. Thank you. 

Senator Jonathan Dismang Alright, members, do we have any other questions? All right, seeing none, thank you all. Yeah. All right. Members, we’re going to move on to E. We’ll take these one at a time. E1.

Nick Fuller Item E1 is a letter to you all requesting personnel changes for the institutions. There is an attachment to this letter. There are nine institutions requesting changes. Of the 40,018 currently authorized positions, the total change you’ll see behind is an increase of 17 for all institutions. And we’re just requesting your approval of this request to be included in the budget bill draft. 

Senator Jonathan Dismang All right. Thank you. Members, do we have any questions on E1? Seeing no questions, we need a motion to adopt. We got a motion to adopt. We’ve got a second. Any discussion on the motion? Seeing none, all those in favor, signify by saying aye. All those opposed? Motion carries. E2. 

Nick Fuller E2 is a letter requesting some special language inclusion for North Arkansas College to account for them joining the University of Arkansas system. Some very similar language we did when East Arkansas College was brought into the system. We’re just requesting this to be included in their bill. 

Senator Jonathan Dismang Alright, thank you. Members, do we have any questions on E2? Seeing no questions, I’m going to recognize Senator Bryant for a motion. 

Senator Joshua Bryant Thank you, Mr. Chair. Mr. Chair, I make a motion we adopt the letter and update North Arkansas College’s name in the bill drafting. 

Senator Jonathan Dismang Alright, thank you. Members, we’ve got a motion. We’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. It’s going to take us to F. Mr. Rice? 

Henry Rice Thank you, Mr. Chairman. Henry Rice, BLR. So if you’ll please look at the document entitled Summary of Institutions of Higher Ed, which should be on your desk. It’s a summary of appropriations that we hope will assist you in your decision making today. 

So you’ll be looking at and making a decision on the appropriations for treasury, cash, and other appropriations that are in your binders. So there are three parts to this summary. The first part, you’ll see, that’s going to be state treasury appropriations which are paid from the Revenue Stabilization Fund, Educational Excellence and Workforce 2000 Fund. 

So if you read from left to right, it’s going to show the institution or the fund. It shows the page the appropriation appears on in the manuals and then the authorized appropriations that they currently have for this fiscal year. And then the Arkansas Higher Education Coordinating Board recommendations, that’s AHEC B in the Manual for Fiscal Year 2027. 

And the following columns, they show the change in dollar amount for the next fiscal year, as well as the percent change from the current authorized appropriation levels. The far right column has asterisks in it, and one asterisk will show that there’s a line item change. 

Two asterisks will show there’s an addition or deletion of a line item. Three asterisks indicate the addition or deletion of a new appropriation section, which we do not have this go around. And on the first page, it totals the four-year institutions at the bottom. On the second page of your handout, it’s going to total the two-year institutions in the same format. 

And these are also the treasury fund appropriation summaries. And on the third page is the beginning of the cash appropriation summary. These are the ones that are paid from their tuition and fees, sales, and federal funds. It also has the same form. On the very last page, we have what we call other appropriations on this handout. 

It’s going to include tobacco funding, special revenues from court filings that go to the University of Arkansas and UALR law schools and breast cancer research funds, among others. Mr. Chairman, that’s all I have on this summary. 

Senator Jonathan Dismang Thank you. Representative Garner, you’re recognized for your question. Members, you have a budget manual that’s going to refer to the pages here as you’re kind of going through. So you can kind of cross reference. 

They’ve given us summaries. I should have said that earlier. And you can use these summaries then to go back to your budget manual and get a little bit of a deeper dive if that’s what you’d like to do. But you’re recognized for your question. 

Changes to funding

Representative Denise Garner Great, thank you. I just will repeat the question. There are several institutions that have 50% or more, two at 50% and one at 150%. If you’ll just explain why the change. 

Henry Rice Could you point out specifically which one you’d look at so we can just go through these one by one? 

Representative Denise Garner So the first one is 53.79% at the U of A School of Mathematics, Science and the Arts. 

Henry Rice We’re on page 74 in the manual. That’s a 54% increase. It’s almost 7 million. And speaking to the UA system, it was an error in their fiscal year 2026 request. That’s the current fiscal year. The carry forward funds that they intended to use, there was not adequate appropriation for that. 

So that has since been corrected in Peer for this fiscal year. And it’s also for the construction of a maintenance building and wood shop and construction of Alumni Hall and Charter Field project. 

Representative Denise Garner That’s perfect. And then the next one is, it looks like South Arkansas College, 55.56%. On page 4. And 287 in the manual, if that’s easier. 

Henry Rice We’re on page 287, as you said. That’s about 12.2 million, 55.6% increase. So this increase, that’s going to provide for the ongoing construction of SAC’s first residence hall and a multifunctional baseball stadium. 

And also the college is renovating and constructing an industrial chemical lab for training lithium industry employees and future employees in that field. And operating expenses have expanded. That’s because of, to furnish purchases and supplies related primarily to the new facilities. 

Representative Denise Garner Great. Awesome. Thank you. And the last one is SAU Tech at 150%. 

Henry Rice We are on page 295. It’s a $20.7 million appropriation increase, which is a 149% increase. And that’s going to provide for recently awarded federal funds. That’s $15 million to construct the Aerospace Defense Manufacturing Center of Excellence. And $5 million is to provide educational equipment to the center. 

Representative Denise Garner Nice to hear about those things. Thank you very much. Thank you, Mr. Chair. 

Senator Jonathan Dismang All right. Thank you. Members,Representative Wooten, I think you had a question for U of A Fayetteville. And I think Representative McKenzie did, too, if he’s here. If someone can grab him. Representative Wooten, if you can hit your– all right, you’re recognized. 

If we can have someone from the U of A Fayetteville, I think, or U of A system, one of the two, come up for a question from Representative Wooten. Senator Tucker, is yours on the same? Because I think yours is– while they’re making their way, I’m going to recognize Senator Tucker. I’ll come back to you, Representative Wooten. Senator Tucker, you’re recognized. 

Senator Clarke Tucker Thank you, Mr. Chair. Yeah, mine will be quick. It’s just a follow-up on Representative Garner. 

Senator Jonathan Dismang Henry, this one’s for you, I think. Yeah. 

Senator Clarke Tucker I just had questions about two other institutions, ASU Mountain Home and ASU Newport. Henry. 

Henry Rice Senator Tucker, can you repeat your question, please? 

Senator Clarke Tucker Yes sir, same questions that Senator Garner was asking. I just was curious about two other institutions. Those were ASU Mountain Home and ASU Newport with big increases. Just curious what’s going on there. 

Henry Rice Absolutely. We’re on page 197. This is ASU Mountain Home. It’s an increase of $10 million or 60.1% increase. And that’s going to provide for federal funds awarded in 2024 to support the expansion of the ASU Mountain Home healthcare education facility and enhanced technology to develop the medical workforce. 

And for Newport, we’re on Page 213, that’s an increase of 16 million or approximately 45%. And that’s for also recently awarded federal funds to construct a health science center on campus with a focus on improving maternal and mental health outcomes. 

Senator Clarke Tucker Excellent. All right, thank you. Thank you, Henry. 

Senator Jonathan Dismang Thanks, Senator. Senator Flowers. She has a question for you, too. You’re recognized for your question. 

1890 Extension Program for Historically Black Colleges

Senator Stephanie Flowers Thank you, Mr. Chair. My question concerns the funding or the appropriation request for U of A at Pine Bluff, the 1890 extension program. Appears to be a decrease, a change projected or recommended of 6.25%. 

And I want to know, is that, what is that based on? Did you get information from the university concerning matching funds that they will need to match the federal appropriation? 

Henry Rice Thank you, Senator Flowers. My understanding in talking to the ADHD staff is that the appropriation has been reduced to align with expenditures. They’re going to have the same funding in the RSA. This is just going to match their appropriation levels more adequately or accurately, I should say, to their funding level. 

Senator Stephanie Flowers Would that meet the requirements for the federal match? 

Henry Rice So this is their state treasury, so it should not be affected by the federal. 

Senator Stephanie Flowers But the  university or the state needs to come up with a percentage to match the federal. So I don’t understand how they arrived at recommending a decrease for the next fiscal year. 

Senator Jonathan Dismang If I understand things correctly, they weren’t spending the full appropriation. So this is a decrease in the appropriation. It does not decrease the amount of actual spend they’ve historically had. And then, and it may be we need to circle back up because I know we’ve kind of bounced back and forth. 

I was trying to finish up with Henry before we moved on to the U of A. And we may need to bring someone up from DFA or from UA Pine Bluff to get more specific. But again, my understanding is there is not a change in how much they’re spending. It’s a change in appropriation, which they were not meeting. 

And so they just lowered their appropriation and get closer to the actual spend. But we can have someone come up from UAPB?

Senator Stephanie Flowers But I want to also ask about the appropriations, if any, recommended for UA Fayetteville’s 1890 extension program. I don’t see that in your Exhibit F. 

Senator Jonathan Dismang And I think these are just the changes that are going to be listed here. But I will pivot. You want to try that, Henry? Do you want to punt it back over to U of A and we’ll start with U of A Fayetteville. All right, and I think this is a great segue for y’all to introduce yourself. And then Senator Flowers, if you can restate your question. Representative Wooten, I appreciate you being patient. I’m going to get to you just as soon as she’s done. 

Charles Robinson Good morning, everyone. I’m Charles Robinson, the Chancellor of the University of Arkansas. I’ve got some of my colleagues here who will introduce themselves. 

Ann Bordelon Good morning. I’m Ann Bordelon. I am the Executive Vice Chancellor for Finance and Administration. 

Craig Tigges Craig Tigges, Senior Associate AD and CFL for the Athletic Department. 

Randy Massanelli Randy Massanelli, Government Relations, University of Arkansas. 

Senator Jonathan Dismang All right. And so some of this will be, I think for some of y’all at the table. She had a question about the land grant and if it was– I’ll let you restate it, senator. 

Senator Stephanie Flowers I’m concerned about and I’m inquiring about the 1890 extension program at UAPB. It appears to have a recommended change, a decrease to 6.25% for the next fiscal year. And I want to know what is that? 

Is it just based on what UAPB spent in the 1890 program? Or is it a requirement that the state match federal funding with a certain percentage and does this meet that requirement? 

Charles Robinson Senator Flowers, the University of Arkansas Fayetteville and the budgets for University of Arkansas Pine Bluff are different budgets. So I’m not aware of the issue for the University of Arkansas Pine Bluff. I think they have representatives here who could address your question because I’m not aware of this funding issue. 

Senator Stephanie Flowers Well, it’s a HECB recommendation for the change to reduce it. So, Mr. Chair, is there somebody from that particular board? 

Senator Jonathan Dismang Yes. But let’s go ahead and– I kind of let you jump ahead of Representative Wooten. And so if you don’t mind, I’ll circle back after we finish with U of A Fayetteville. I thought you had another question related to the 1890 with the U of A. Is that–?

Senator Stephanie Flowers I want to know if the University of Arkansas at Fayetteville got an increase. Did it stay at the same level as the last, this past fiscal year? 

Charles Robinson We will have to get back with you. We’re not aware of the change. So we’ll have to get back with you, Senator Flowers.

Senator Stephanie Flowers  But you acknowledge you do have a 1890 extension program? 

Charles Robinson The extension program, I believe, is the Division of Agriculture. It’s not with the University of Arkansas Fayetteville. 

Senator Stephanie Flowers Well, the designation comes to the university. 

Charles Robinson I’ll just have to study that. I’m sorry that I’m not prepared to address your question, but I’ll make sure we address your questions. We’ll get back with you. 

Senator Stephanie Flowers I’d like that so that I’m able to compare what is going on with these two different 1890 programs. 

Charles Robinson Yes, ma’am. We’ll get back with you. 

Senator Jonathan Dismang All right, thank you. All right. Representative Wooten, you are recognized for a question. 

Athletics and NIL at U of A Fayetteville

Representative Jim Wooten Thank you, Mr. Chairman. Chancellor Robinson, your budget– is the 1$4 million that is going to be transferred to the athletic department, is it in the budget? 

Charles Robinson Well, I’m not aware of 14 million. A board passed a resolution requiring the university to waive the campus transfer, which was 3% of athletics budget, plus provide athletics with an additional $6 million in additional revenue. Now that 3% of the athletic budget, it’s a growing amount. 

So next year we’re projecting that’ll be 5 million or so. Now the 6 million is prescribed in the resolution. And so for FY27, we will submit a budget that addresses and facilitates the board’s resolution. So I have given the president of the system options on how we might be able to do that. 

And I will learn from the president and the board how they want us to facilitate that transfer of funds. The campus transfer now, that’s waived. So I had already waived that. So that was something that previous chancellors had set up with previous ADs and that was coming in on an annual basis. That’s why the resolution requires us to waive it. We’ve waived it. 

But the $6 million is the additional amount that the resolution mentions, that we’ve given the president options on how we might facilitate that particular portion of the resolution. And that will show up in our FY27 budget. 

Representative Jim Wooten The impression has been left by the Board of Trustees and others that this is the first time that money has been transferred from the university to the athletic department. It’s truly in reverse. I mean for years and years it’s been bragged about in the sports pages about the amount of money, that 5 million or 6 million is given to the university. Is that true? 

Charles Robinson Well, it’s true that we’ve never transferred money to the athletic program in a way that we are being asked to do in this resolution. Now, how all this plays out depends on how the board and the president address our recommendations based on the resolution. But it’s true that this is a historical change. 

We have never been asked to do this. We’ve never done this, but the board has spoken. And as chancellor, I have my orders. And we’re going to carry it out according to how the board wants us to. 

Representative Jim Wooten Well, where is the 6 million going to come from? Well, let me rephrase that question, if I may, Mr. Chairman. When was the last time the university got an increase from state revenue, from funding from us, appropriations? 

Charles Robinson I believe that was last year. It’s in this current fiscal year.

Ann Bordelon Outside of the productivity funding, there’s not been a change in the appropriation. 

Representative Jim Wooten There’s not been a change? Okay. So where is the 6 million going to come from? 

Charles Robinson Well, we’ve grown a lot. And some of the resources, I mean, some of resources that we’re being asked to send to athletics, we will absorb in our budget to the best of our ability because we don’t want to tax our students any more than we already, unfortunately, have to in order to just meet the needs of our growth. 

But there will be a portion of this, depending on how much the board settles on in terms of the amount of money, that will come from the student body. And that’s inevitable. I’ve shared that with the president of the system. 

The amount in which we have to charge the students will depend on whether or not this is a strict 6 million that we transfer or if it’s something other than that, if it is less than that. 

Representative Jim Wooten No one really knows an answer. 

Charles Robinson Well, I mean, at this time, I know what the resolution says. And so I’m prepared to transfer the $6 million and to subsequently absorb a portion of that in our growth so the students don’t have to pay. But there will be a portion of this that the students will have to pay.

Representative Jim Wooten So in order to be competitive in the football program and with the new coach and all the assistants, additional assistants that he’s hired, we’re going to put that on the back of the students? 

Charles Robinson As you know, I’m on the record of saying that I didn’t think we needed to do this right now. It is true that the competitive landscape is very challenging and very different. But it was my determination that the athletic budget had what it needed for FY27. They’re raising money. 

They’re doing lots of things to really grow their budget to meet the revenue share challenge so that we can be competitive. But the board has spoken and I will follow my orders that the board is giving me to the best of my ability. 

Representative Jim Wooten So, but any way we go about it, some of it is going to wind up on the back of the student body or in increases or in their fees for athletics. 

Charles Robinson It appears that that is the case. 

Representative Jim Wooten In that, they have to give 20 million in the athletic department to the players. Is that correct? 

Charles Robinson There are players, not every player, not most, in the revenue sports that are receiving revenue share. And we have to do it to compete with other schools. And we want to be competitive. And we have been doing that. 

And yes, so there will be this dynamic where our students are going to pick up some of the operational costs of athletics. But the revenue share, actually, the athletic department had fully funded their revenue share. So this money is not needed to do that for FY27. It will be used for other things, I’m sure, to support the athletic program. 

Representative Jim Wooten Mr. Chairman, that’s all I have. I just admonish the university to move cautiously in this, because I do not feel, in my personal opinion, that we can be competitive year after year after year in the SEC. 

Charles Robinson Yes, sir. 

Representative Jim Wooten And I’m an old football coach, but I’m worried about the program up there. And I think you share those thoughts. 

Charles Robinson I believe we need to be responsible in all of our budgeting so we are not taxing our students in ways that interfere with affordability and access. And so of course, the Chancellor is going to be cautious. And so I appreciate that. But I want us to be competitive. 

And I believe– we had a real bad football season, but this is not going to be the norm for us. I think we’ll definitely get better. I have a lot of confidence in Coach Silverfield and his team. And I believe that we will be competitive in football. And we’re very competitive in baseball, very competitive in  basketball. So we’ve got work to do, but I think we will get better. 

Representative Jim Wooten Thank you. Thank you, Mr. Chairman, for your patience. 

Senator Jonathan Dismang Thank you. Representative McKenzie,you’re recognized for your question. 

Representative Brit McKenzie Thank you, Mr. Chair. So just a few questions on the subject. And I’d like to mark the moment for history that Representative Wooten and I are aligned similarly on a concept like this. 

So I have a few quick rapid questions. Am I correct in assuming that from what your website tells me that the cost of admittance– or sorry, the cost of attending school is around $31,000 once we account for tuition, fees, room and board, meal plans, et cetera. 

Charles Robinson Yeah, it’s in that range. Yes, sir. 

Representative Brit McKenzie I think I have a general understanding of what we’re asking for here. The $4.5 million transfer that you’ve waived, and there’s been some historical precedent to waive, tell me more about that. Why is it? Is it required from a bond repayment perspective? Is it just a gift? Or is there some statutory or board direction that makes that transfer occur on an annual basis? 

Charles Robinson The transfer was established by former Chancellor Dave Gearhart and former athletic director Jeff Long. And they transferred the money because the SEC revenue was flowing really well. And it was a way to demonstrate that athletics was contributing to the academic side of the house. 

And the decision was made by that leadership to fund a bond of Champions Hall with a portion of that transfer, 2.6 million roughly. Any money in addition to that was being invested in research because we’re R1 and we’re trying to get better in our research. So we were investing in that so we could become better at that. So that’s where the transfer was. That’s where it originated.

But with the revenue share that came to all of the Power 4 made the decision to defer that amount because if you look at projections from the SEC, this revenue share, the universities were going to have a hard time managing revenue share without some additional support. 

So we’d already made that decision because we want a competitive athletic program, competitive football program and basketball and all of our programs. So this resolution, again, comes in addition to that. So the transfer was born at previous management. We used it for the bond and research. 

But when we had to move away from it, we understood that that was something that operationally we needed to do. We were going to defer it and then see where we were in two or three years. And if athletics became more, if the budget became better, operational budget, then we’d consider what we could do with that transfer to reinvest it in the academic side. 

Representative Brit McKenzie The bond, has it been entirely repaid? Where are we on the schedule with that? 

Charles Robinson No, the bond hasn’t been entirely repaid. I’m not sure where we are on the schedule. 

Ann Bordelon I don’t recall where we are on the schedule off the top of my head. But for the foreseeable future, we have identified a way to pay that from internal funds. Because we do have debt that is falling off of our debt service schedule. So because of those reductions, we’re able to offset it. 

Representative Brit McKenzie But the original intention, that bond, has not been settled. And this is not trying to be cute, but we’re still investing in research at the University of Arkansas in Fayetteville, correct? 

Ann Bordelon Yes, we are still investing in research. 

Representative Brit McKenzie So the impetus for that transfer still exists in our needs in Fayetteville today. 

Charles Robinson Absolutely. 

Representative Brit McKenzie I do want to just note the serendipity of what the percentage increase or the dollar value increase that is being requested for Fayetteville this year is roughly $7 million. And we now have a $6 million bogey that the institution has to account for to help subsidize athletics. 

I don’t know if– that’s probably a productivity model that gets us to that number. If there’s a raw increase that came in, request of an increase that came in prior to this board direction, that just seems a bit odd. And the process here, albeit not a member of the Budget Committee, has asked us to review and analyze these requests based on their merit and the value that they’re going to have for our taxpayers. 

And I do want to note, just because this is not a well-known secret– I mean this has been published– where are we with the recommendations to the board for what that looks like? We’ve heard a lot about, this will land on the students. 

I’ve read in periodicals that we can’t do some form of an athletic fee because that would affect the athletic department’s procurement exemption. A, what is it you’ve identified? And I don’t need to know the granular details or any of us do, but more than, it’s going to fall on the students. And I’ll let you answer that first and I’ve got a follow up. 

Charles Robinson Well, we have submitted three proposals to the president of the system. And the president of the system will take these proposals back to the board of trustees for various ways in which we could meet the terms of the resolution.

One of those ways, I know, is the full 6 million, because that’s what the resolution prescribes. And then we will determine, based on what the board says, what impact that will have on our students relative to covering the costs, the new costs that the university is picking up because of the resolution. Am I answering your question? 

Representative Brit McKenzie You are, yeah. So has the thought exercise, the back of the envelope math, been done to amortize that across whatever, 34,000 students, inclusive of the 6 million that you’re talking about? And then the 5 million you’re going to have to make up for in operational expenses. 

Charles Robinson I think it’s best for me to wait until I know exactly what– I mean, we have some general ideas of what each proposal would cost relative to the students. But I don’t want to get out ahead of the board. Because what if they decide they don’t want to do it. And that’s me probably being a bit more hopeful than I should be. 

But still I think the board has a right to make decisions that they think are best to help the universities. It’s all right if we disagree. I mean, that’s the American way. We disagree. But at the same time, I know that the board has the authority and I will execute their authority to the best of my ability. 

So I understand the desire to know, but I don’t want to get ahead of the deliberations of the board. They may think about this differently. I don’t know. I’m not involved in those deliberations. I mean, am I answering?

Representative Brit McKenzie You are, and I do respect your responsibility as a fiduciary of the institution to do what your board, your independent commission, is telling you to do. I just can’t fathom a scenario in which one extra dollar that a kid’s going to have to go to Sallie Mae to go get 6.5% secured against a 15-year note, that makes sense in the grand scheme of their needs of the institution. 

So just like Representative Wooten, I appreciate the information provided today. But again, I would also admonish you to think hard about the state of Arkansas and what our students are bringing to the university. 

Charles Robinson Yeah, we have. And that’s why we’re covering some of this with our growth in our existing budget so that it doesn’t fall fully on the student body. Because we’re sensitive to access, particularly for Arkansans, and we don’t want to raise tuition and fees one dollar more than we have to. And that is every year we try to do the math to keep those as minimal as we possibly can and still operate in ways that help our students and our faculty be successful. 

Senator Jonathan Dismang All right, thank you. Members, before I get to Senator Hill, Representative Garner’s got a question that she’s going to ask each institution. I think you guys have received a notice with a packet of maybe five questions. 

I think some of those were unanswered. I’ve been trying to contemplate how we’re going to do that in an expeditious way so that we’re able to move through. My understanding is it’s going to be some type of yes or no question. 

So what I’m going to do is, does everyone have section F or access to section F in the audience? Just trying to figure out how we’re going to go through this. So amongst yourselves in the audience, while we wrap up– y’all aren’t done, unfortunately– while y’ all wrap up with the– I think we’ve got two more questions for Fayetteville, if you could be forming a line in which you will come through and identify yourself and respond yes or no in the order that is on this. 

So if you can pull up section F– so Arkansas State University, Jonesboro, you’re up first. Second, it’s going to be Arkansas Tech. We’ll skip to Henderson. Then we’re to SAU. Then we are to the U of A system. Then we have U of A Fayetteville, then Fort Smith, then Little Rock. If you can pull that and start forming your line, you’ll help me speed things up. 

Oh, I thought you were saying you want them to come forward. All right, we’re going to come back to her then. I think we’re, instead of doing that– I misunderstood. I was pretty sure that’s what we discussed. But she’s going to ask the question, and then y’all are going to respond back to her now. I think that we’ve pivoted. Yeah, in the interest of time. All right, Senator Hill, you’re recognized for a question of UA Fayetteville. 

Senator Ricky Hill Thank you, Mr. Chair. Chancellor, I’m over here. I appreciate the stand that you have taken on this issue as far as the athletic side of it goes. My biggest issue with this, mine’s going to be more of a comment, is I’m for winning, too. 

But my winning is a little different, evidently, than the University of Arkansas. My winning is in education and not athletics. I feel like these students are paying enough money already. I feel like we’re going to try to put a burden, regardless of how we sugarcoat this, the student is going to pay for this. 

The end user always pays for an increase, no matter what you do. If you go to a convenience store or anything else, the end user pays for it. These students are going to end up paying any way we look at it. So we’re going to look at putting a burden on a single mother who’s trying to go to school, working two jobs, and trying to go to school either part-time or full-time. Or the first-generation student who’s trying to go school to change the economic value of their life. 

We’re going to look to put them more in debt while they’re trying to get student loans or whatever they’re trying to do. I commend you for the stance you’ve taken on this and just want to say thank you. And I hope the University of Arkansas’ Board of Directors will look at the students’ winning and not just the athletic department. So thank you and I appreciate your stance on this. 

Senator Jonathan Dismang All right. Thank you. Senator Hester, you’re recognized for a question.

Senator Bart Hester Thank you, Chancellor Robinson. I think you do a remarkable job at the University of Arkansas. I think I’ve watched you over a very long time deal with very difficult situations and find solutions.

 I know that we’re going to work it out this time because I have every confidence in you and your leadership at the U of A. Thank you for the difficult work you do. We are in this position, not because of your choice or the Board’s choice, but this was a lawsuit settlement over NIL with the NCAA. Is that correct? That’s what put us in this spot. 

Charles Robinson Yes, sir. 

So there’s a lawsuit settlement– thanks, trial lawyers– put us in a bad spot again. Now we gotta find some money. And we either choose to take it all out of the athletic budget, which is already underfunded compared to a lot of our competition, and you’ve been charged with figuring this out. So do you know, where does the University of Arkansas rank amongst our other SEC schools on tuition? 

Charles Robinson In the 16 schools, we’re on the bottom quartile in tuition, where we want to be, down in the bottom, because we don’t want to charge students more than we have to. 

Senator Bart Hester That’s right. Yeah, I knew the answer to that. That’s why I asked. You’re doing a great job. We’re doing a great job. We are where we want to be. We are trying to do our best to add value there. What have the other schools in the SEC– we’re not the only people that are dealing with this shortfall based off this settlement. What are the other SEC schools doing? 

Charles Robinson To my knowledge, schools are charging students to some extent, not all of them. I mean, some choose to address it through fundraising and getting support from the private sector, raising ticket prices, foundation prices, so that you can pay to sit in a more privileged seating. 

So there are a variety of ways. We have, right now, a student athletic pass that students can opt into, but it’s not required. And a number of schools have those student athletic passes as well, and it generates revenue. But it is common to have a student athletic fee. I mean, we’re in rarefied air not having one. And for me, it was a point of pride. 

And I think for the university, for most of its history, it’s been a point of pride. But I do understand the concern about the current state of things. And as I’ve said to board members, if there was a time when I thought that the university needed a student athletic fee, I would ask for it. I just didn’t think that we needed it now. But I understand that there are growing needs for athletic programs in the Power 4 to be competitive in this new environment. 

Senator Bart Hester I wouldn’t expect you to know this answer, but do you know if any other states have chosen to give an increase from general revenue to their schools to help with these shortfalls? 

Charles Robinson No, I’m not aware of general revenue going to schools to offset revenue share. I’ve not seen that. 

Senator Bart Hester We have a tremendous amount of athletes that go to school, which are students as well. I think there’s a huge value to recruit these type of elite, competitive, hardworking people to our state that I believe they add a lot of value. When schools are winning athletically, every area of the school wins. At the engineering department, the English department, every area of schools win when they win athletically.

I think there’s no accident that the University of Alabama has a significant increase in National Merit scholars since they’ve become a winner in football. But has there been a consideration at all that the value of Texas students coming to Arkansas, and we have this discussion all the time, and I love that the Texas students choose to come here, but there’s value in it on the dollar-wise. 

Is there any consideration– was part of any of your proposals– and if you can’t talk about it, I don’t want you to. I’m not looking to get anybody in hot water. 

Charles Robinson I appreciate that. I already feel like I’m in hot water.

Senator Bart Hester You are. That’s the nature of your job. 

Charles Robinson I get it. 

Senator Bart Hester Maybe out of state students covering this not as much as in-state students. 

Charles Robinson Again, I mean, we are looking, we’ve looked at every option. I mean, we charge out-of-state students on an annual basis more. I mean if we raise tuition and fees, we raise it more for them. And we should because the state supports the University of Arkansas for Arkansans. 

So I don’t have a problem with that. But to differentiate on how you do something like this, I think is disruptive. We want students to come from all over to the University of Arkansas. We want competitive programs. We are thriving from an enrollment standpoint. We turn away students on an annual basis. 

I have 35,000 applications that are coming for the Fall 26. I don’t have room. I mean, this is like the baby Jesus. I don’t have any more room in the inn. So that’s a good story to tell. And my sensitivity around costs is tied to all of this, and particularly for Arkansans. 

So I get it. I want us to be competitive. We will be competitive. The board has spoken. We’re going to follow the board’s edict on this. But I think we all want the same thing, a competitive program that helps the university continue to be attractive to students who want to come here and get their education at the University of Arkansas. 

Senator Bart Hester Thank you, I’m done. I know you’re going to work it out. I have confidence in you. 

Senator Jonathan Dismang All right. Thank you. That was the last question. Thank y’all very much. No, I’ve got two more popped up there. Sorry. Y’all went off and then came back. All right. Senator Hill, you’re recognized for a question. 

Senator Ricky Hill I guess my question is, I know we did a state tax exempt as far as student athletes in Arkansas. Have you done any calculations at all to see if the state income tax was put on the NIL money, what revenue that would bring back that the State could give to the University of Arkansas? 

Charles Robinson No, sir. I have not done that calculation. I have not. No, Sir. 

Senator Ricky Hill Thank you. That’s kind of a loaded question. 

Charles Robinson Yeah, it is. That’s for you all to figure that out.

Senator Ricky Hill But I just wanted to make a statement that we did give a state tax cut to the athletes at the University of Arkansas, that we were told by legislators that this would make us a winning program throughout the state. 

And evidently that hasn’t happened yet. So hopefully that will in the future. But just kind of wondering if that tax was in there, where we’d fall out on that. And thank you for your time. As I said a while ago, I think you’re doing one heck of a job. 

Charles Robinson Thank you, sir. 

Senator Jonathan Dismang Thank you. Representative Shepherd. 

Representative Matthew Shepherd Thank you, Mr. Chairman. And I appreciate Senator Hill pointing out a piece of legislation that I sponsored. Did not make any guarantees of a winning program, but this discussion is exactly why we considered and why we passed the exemption, which only applies to money paid by the institution to student athletes. Wouldn’t you agree, Chancellor? 

Charles Robinson Yes, yes, sir. 

Representative Matthew Shepherd And in order to be competitive under the House settlement, you can spend a certain percentage of your athletic revenue. Do you know what the percentage is? Maybe your colleague there could. 

Craig Tigges Yeah, currently under the House settlement, this current fiscal year is $20.5 million that can be shared with our student athletes. We’re currently spending $18 and $2.5 in new scholarships as required by the SEC. So there’s a mandate with them. That’ll increase 4% annually for the next three years, and then it recalculates on a basis of the Power 5 Conference. 

So they take all the schools within the Power Five, and it’s 22% of selected categories on our NCAA survey. And that’s how they recalculated it. And then it’ll start a new cycle and it’ll do 4% increase over time. 

During a 10-year window, the plaintiffs also have two look-in windows to do that recalculation of 22%. It’s part of the reason that we need to remain nimble and flexible as we go forward because we don’t know when those plaintiffs will make that call to action of that recalculation basis. So that’s how it gets to it. Next year is 21.32 and it will continue. 

Representative Matthew Shepherd Follow up to that. In the SEC, do most schools pay the maximum that they can under the House settlement? 

Craig Tigges  Yes. I’m not aware of one school that’s not. We’re fully committed to stay at the maximum if we– it was necessary. If funding is available, all that stuff is important from a competitive standpoint. Everyone’s taking a competitive, determining their competitive positioning within college athletics and how they’re doing all that stuff. So, yes. 

Representative Matthew Shepherd Wouldn’t you agree that that exemption is really more about the institution than the student athlete. Because what this exemption does is it actually stretches the institution’s money farther. Because when you’re competing, for a student athlete, you’re not having to gross up that amount to compete with other states. 

And wouldn’t you agree it would be great if we eliminated the income tax, which we are working on and continue to reduce and going to do more in this session– wouldn’t you agree that this actually is saving the institution money, is stretching the institution’s dollars farther that you otherwise would be and is actually helping to try to reduce the impact of the House settlement on the institution? 

Charles Robinson Yes, I do think it helps us, particularly when we’re recruiting against institutions that don’t have a state income tax. That’s something they can present to the agents of these student athletes and say, You can come here and you’ll make this X amount but you don’t pay an income tax. So yes, it helps to be on more of a level playing field with students from those states. 

Representative Matthew Shepherd Mr. Chairman, could I have one final question? I’ll take silence as acceptance. And maybe Vice Chancellor Massanelli, I know he’s retiring and is very pleased to be here at the table today. Could you speak to that athletics, it’s much larger than just the competitiveness on the field. It’s much longer than wins and losses. 

I think Senator Hester spoke to this. Just, could you talk about the impact of having a successful program and what it does in regard to fundraising for the institution, the applicant pool for the institution? The sales tax revenue, which goes largely to an area of state far away from where I live. 

And also just the value of our institutions to the alumni and the fan base across the state. Could you speak to that? Because I think that sometimes– nobody likes to be in this position. And we have, every time we ran an NIL bill, we’ve all said we would prefer not to have to be in this position. 

But unfortunately, because of litigation and other things, everybody’s trying to make the best of this situation. But there is also economic value to the institution, the state, and the region at large. 

Senator Jonathan Dismang But just to make sure, representative, you’re advocating that Fayetteville will pay a portion of its sales tax revenue and maybe that be what supplements? I think that’s a wonderful idea. [Laughter] 

And just real quick for everyone, I know you’re going to answer that question, but I want to go back. Because we have wandered around all morning. And I’m trying to give latitude. But I just want to talk real quickly about what it is that we’re here to do. 

And what we’re here to do is allow BLR to draft appropriations so we can have even bigger discussions than this when we get into session. So just kind of keep that in mind. This is not the end of the road. This isn’t your last chance to ask questions. Another thing I would really, really strongly encourage you to do is reach out to the institution or the agencies or whoever else and ask your questions. 

It’s not always necessary that what we do is in the public. Sometimes it’s needed and helpful. And sometimes if you just have a general question about something, reach out and pick up the phone and make a phone call. And specifically on what we’re talking about here, again, I think it’s a good discussion. 

I think it is good for the board and the U of A system to know kind of what members thoughts are on it. And I think it’s good to have it in the public. But we will not adopt anything today that will change this situation for the U of A. Okay? 

When we pass through appropriation, if you are wanting to make a change, you would have to adopt special language. And just keep in mind, when you do that, it’s probably subject to Amendment 33, and ultimately still the will of the university system. 

So again, I just want to– I know we’re going down a road. It just seems like I keep having more people pop into the queue. Let’s try to find an end to this discussion. Let these good folks– let someone else take the table. I think, again, Senator Flowers has got UAPB. If y’all can be on deck, that would be great. But with that, I’ll let you answer questions. Sorry to interrupt you. 

Charles Robinson I just want to say that there’s nobody more interested in a successful athletic program than the Chancellor of the University of Arkansas. I want our athletic programs, every single one of them, to be annual national champions. 

And we will do everything we can to support them to the best of our ability because they help everything, much as Representative Shepherd has pointed out. There’s nothing that suffers when athletics is doing well. And you even treat us nicer when the Razorbacks win. And I was worried after that Florida game because I thought, man, that’s not what we needed coming here. 

So yes, we all want success. And I appreciate all the comments and all the interest in the University of Arkansas because I know it comes from the right place. We’re trying to support this state, support state institutions, and make sure that we’re doing the right thing for our students. So thank you. And yes, go hogs. I mean, that’s a way to wrap that up in my opinion. 

Senator Jonathan Dismang Representative Wooten, you’re recognized for a final question. 

Representative Jim Wooten Thank you, Mr. Chairman. You just had two volunteers in Senator Hester and Representative Shepherd. Do you have anyone stepping forward with $50 million that’s happened at SMU? 

Charles Robinson I’m not aware of that. I’m always hopeful, but I’m not aware.

Representative Jim Wooten Those two might be willing to give 50 million. 

Charles Robinson I appreciate that. We’d take it for sure. 

Senator Jonathan Dismang All right. Thank you. And I appreciate the time. And glad to wrap that up with Fayetteville chunking in its share of sales tax revenue to help support the U of A system, which it is greatly benefiting from good men and women. 

All right. With that, I’m going to recognize Senator Flowers. And then hopefully, we’ve had someone from University of Arkansas Pine Bluff. Okay, if you could just recognize yourself and then, Senator Flowers, you’re recognized for your question. 

Senator Stephanie Flowers New chancellor is coming up. 

Anthony Graham Anthony Graham, Chancellor at the University of Arkansas Pine Bluff. 

Janet Broyles Janet Broyles, Chief of Staff at UAPB. 

Nick Fuller Nick Fuller from the Division of Higher Ed. I’ll be representing the Higher Ed Coordinated Board. 

UAPB 1890 Extension Program

Senator Stephanie Flowers My question, and Chancellor, you might be able to answer this. I know you’re new to the university. We have this 1890 extension program. And the funding for it, as I understand it, is the state is required to match some of the federal appropriation of funding. 

So in the past, UAPB has not received all of the state match portion. We’ve been trying to correct that and get the match that is required from the state for receiving these federal funds. Can you talk about– on this summary, it has 1890 extension program at UAPB authorized and recommended to receive a decrease of 6.25 percent. 

And when you look at our budget manual, the appropriation for 25-26 was 6,396, 701. The recommendation now from the AHECB is 5,997,200. What is required for this next fiscal year, if you know?

Anthony Graham Yes, ma’am. So the federal match and the state match, there’s a requirement that should be a one to one match. I do want to commend the state of Arkansas. There are states in the south that have not lived up to that match. So I do commend the State of Arkansas for committing to moving in that direction. With respect to your question about the specifics of this exact match, I’m actually going to pass to Mr Fuller here. 

Nick Fuller And I will say, as Senator Dismang mentioned earlier, that 6.3 million was the appropriation only, not the funding side of that. That was in anticipation of a potential increase on the federal portion that did not materialize. We did allocate 5.8 million in RSA for the match last year. And the new recommendation for the 5.9 is bringing that appropriation level back in line with the more accurate funding level. 

Senator Stephanie Flowers Well, do we know exactly what the one to one match is going to be required? 

Nick Fuller I don’t know that we know the specific for the full. I think it’s on a calendar year basis. We haven’t received that. So we’re still projecting out the need, as we do a fiscal year budget. I will say, this past year, we added $2 million in RSA to that fund to make sure that the state is providing ongoing support to meet that match. And that’s helped us not have to request a waiver over the past two years to meet the match of that 1890 grant. We did in the past years before that.

Senator Stephanie Flowers So we did meet the match this past year? 

Nick Fuller Yes, ma’am. 

Senator Stephanie Flowers And we believe we’ll meet the match for the next fiscal year? 

Nick Fuller Yes ma’am. 

Senator Stephanie Flowers Will there be any other additional funding appropriated just in the event that the feds increase the match? 

Nick Fuller The recommendation, that 5.9 million, is a percentage increase over the current funding allocation. That is 5.8 million. I believe 5.8 is again in the balanced budget that was presented to you this morning. So there could be the potential if the match amount is raised, that appropriation is available to add funding. But additional funding is not being allocated above the 5.8. 

Senator Stephanie Flowers You know, that’s my district. I’m from Pine Bluff and I’m quite concerned about us keeping that extension program. We do good work. Good research is performed. 

Nick Fuller And I will add on that, we do have $2 million that’s put in a set aside in a holding account. In the event that that goes up, we can release funds to help make sure that match is met. 

Senator Stephanie Flowers Okay, thank you. And Chancellor Robinson from UA Fayetteville mentioned that the division, their division of agriculture at the university is managing, I guess, or controlling their extension program, their matching funds. I don’t see that anywhere in the manual. It doesn’t say. 

Nick Fuller Yes, ma’am. Their portion and what they do for their land grant management, it’s not 1890. It’s a separate land grant that they receive. That is just mixed into their dedicated budget. We just have it separate to make sure that we have it specified how much we’re allocating to the 1890 grant at UAPB. For the Division of Agriculture, theirs is mixed in with their operating budget on the state side. 

Senator Stephanie Flowers When was that done? 

Nick Fuller Many years before I was here. I do not know. That’s been an ongoing thing. 

Senator Stephanie Flowers Well, many years before you were here. How many years have you been here? 

Nick Fuller I’ve been in this role for almost ten years. But I would have to research and tell you when that was combined into one operating. But we did pull out the amount for the 1890 land grant for UAPB. We separated that this past year to make sure that we’re fully supporting that on a state level and make sure the funding goes to meet that match requirement. 

Senator Stephanie Flowers Well, thank you for that. But in your research of the history of this change of management at Fayetteville, I’d like to know in the present budget of Fayetteville. How can we figure out what their portion of the land grant match is? 

Nick Fuller And that will be within the Division of Agriculture, because the Division of Agriculture is a subsection of what was the University of Arkansas at Fayetteville, which rolls into the system. So that’s why the Division of Agriculture will have that piece. It will not be in the University of Arkansas Fayetteville’s budget at any point. 

Senator Stephanie Flowers But it’ll be UA Division of Agriculture. 

Nick Fuller Yes ma’am. 

Senator Stephanie Flowers So does that come under the hierarchy of the university though? 

Nick Fuller Yes, it is part of the University of Arkansas system. 

Senator Stephanie Flowers Okay, well, Mr. Chair, at the appropriate time, I guess when the UA Division of Agriculture comes up here, we’ll be able to find out from them how much they’re projected to be required to have for their land grant match at the Fayetteville campus. 

Senator Jonathan Dismang Are you wanting to do that, senator, before we vote to have recommendations for the appropriations? Or are you wanting to bring them forward when we actually go through their actual appropriation in the fiscal session?

Senator Stephanie Flowers Well, if someone’s here from that Division of Agriculture at U of A, if they can come to the table and say so. 

Rep. Garner’s Legislature Pressure Questionnaire

Senator Jonathan Dismang If we have someone from the Division of Ag, can you make your way forward? And before we do that, I’ve got Representative Garner is going to make a statement, make a request. I think y’all are already aware of the request. And if you could, I guess, staff will get that out to them and make sure you respond back to staff with the question. With that Representative Garner, you’re recognized.

Representative Denise Garner Thank you, Mr. Chair. And I apologize for the confusion. First of all, I just want to thank all of the agencies across the board, but especially the higher ed folks that are here that have sent back information on questions that I sent out to y’all so that we could have this robust discussion during budget session. 

But there was some confusion, I think, on the last question in that series. And I just wanted to clarify a little bit about why it’s not the same as question two. And for colleagues, I’ll be glad to send those questions out, as well as the responses from the higher ed, the institutions, all of the institutions, the agency institutions, if you’re interested. 

But the last question was, If a public employee or public official with disciplinary appointing or budgetary authority over your department puts pressure on any public employee to violate a protected First Amendment right of another employee, how does your department proceed? Many of you answered that question just by explaining your general grievance policy. So I’m taking this opportunity to clarify a little bit about what kind of answers I was seeking. 

Basically, I want to make sure that we are, that steps are being taken to ensure that employment decisions remain independent of political pressure. So I’ve got a hypothetical scenario. Imagine that you hire somebody in your department who is an atheist and has made publicly available statements to the effect that God does not exist. The news breaks and my Christian values are offended. 

So I give you a call and I pressure you to discipline or terminate that employee. I strongly imply that if you don’t, I will hold your budget funding from the entire department. What do you do next? Is there a policy in place that allows you to do the right thing without fear of political retaliation? And is there a policy in place in your department that empowers you as a whistleblower such that you can report my outside political pressure to someone? 

I guess the main thing is that I’m trying to make sure that, and this is the yes or no question, that you can send in your answer to staff and they will get to me so we can look at all of the data together. Can you assure this committee that employment decisions within your agency are based on qualifications and performance and not on whether an employee’s lawful viewpoints align with those of individual legislators? 

So if you will take that question and answer that question, I think in the interest of time and expediency, if you’ll send that to staff. They can send it back to me and I’ll send it out to anyone who’s interested and will take this information, gather it together and talk about all of the First Amendment rights issues during budget season. Thank you very much. 

Senator Jonathan Dismang All right. Thank you, representative. Recommend going back, grabbing the video, get your full question. And if you can send that to the staff, that would be helpful. All right. Thank you. We are back at Senator Flowers. You’ve got a question. 

Senator Stephanie Flowers Good morning, gentlemen. I don’t know if they’ve identified themselves. 

Deacue Fields Deacue Fields, Vice President, University of Arkansas Division of Agriculture. 

Matt Brown Matt Brown, Division of Agriculture. 

Jeff Weaver Jeff Weaver, Director of Government Affairs for the U of A Division of Agriculture. 

Senator Stephanie Flowers My question concerns the land grant funding, matching funding with the fed appropriating so much to the university in years past. I mean, when it was set up, I think it was maybe earlier around the time of the 1890 grant, that land grant that UAPB or AM&N received. I’m trying to figure out what is the match that you get from the state for these federal funds. 

Deacue Fields Well, thank you for the clarifying question. First, I want to say that the Division of Agriculture, our budget is mutually exclusive from the University of Arkansas at Fayetteville. So we have, for our federal match, we received Smith-Lever federal funding for extension. Last year, that federal funding was $6.2 million in federal funding that the state did match. 

Senator Stephanie Flowers Okay, so it seems like it’s close to what the University of Arkansas at Pine Bluff receives for their land grant match. 

Deacue Fields Yeah, for the 1890 match, yes. 

Senator Stephanie Flowers The Division of Agriculture at UA expends that money for research? 

Deacue Fields That portion is for extension and outreach. 

Senator Stephanie Flowers Extension and outreach. 

Deacue Fields So Hatch funding is for research, but Smith-Lever funding is for extension and outreach. 

Senator Stephanie Flowers Is that, those two funding entities that you just mentioned, Smithville and the other, is that the whole land grant that UA Fayetteville receives? 

Deacue Fields So no, as I mentioned, Smith Lever is strictly for the extension portion. Hatch funding covers our research component from the federal government. So that portion was 3.4, 3.5 million for research. 

Senator Stephanie Flowers In our budget manual, how will we distinguish where you have those funds? I didn’t see where that’s delineated or labeled.

Matt Brown In schedule F. Schedule F on page 1 where it says Division of Agriculture, that’s our total state appropriation. But these matching funds are included in those totals.

Senator Stephanie Flowers So in our budget manual and when you all will appear before us later, I suppose, you all will spell out what’s for Smithfield, what’s 4, the other to total the six? Okay, that will be in our manual? But I don’t see that. 

Matt Brown It’s never going to be separately in the manual because it’s all included in the one appropriation we’ve discussed. 

Jeff Weaver Senator, we’ll get that to you. 

Senator Stephanie Flowers I’d like to know that. I mean, how would we know that it’s being used for those purposes if it’s not in your lines for your budget? 

Deacue Fields We can provide details for you. 

Senator Stephanie Flowers I appreciate that. When y’all come back to us, you’ll have that. 

Deacue Fields I’ll get it to you before then.

Senator Jonathan Dismang Okay. Yeah, they’re going to have it to you before then. 

Senator Stephanie Flowers Okay, thank you, Mr. Chair. 

Senator Jonathan Dismang  All right, members, that wraps up, I think, the discussion we’ve had on higher education, at least the questions. With that, I want to recognize Senator Bryant for a motion. 

Senator Joshua Bryant Thank you, Mr. Chair. And thank you, institutions of higher education. I make a motion that the Arkansas Higher Education’s coordinating board’s recommendation for all institutions. 

Senator Jonathan Dismang All right. Thank you. Members, we’ve got a motion. Do we have a second? We’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. Members, this brings us to the Department of Corrections. I’m assuming we’re about to have an exodus of folks. Thank you all for being here today. And I kind of am disappointed we didn’t do the cattle call. But maybe next time. 

All right, members, while they’re leaving, if I can have your attention, because I just want to make sure we’re utilizing time the best we can on how we move forward. We’re going to be working out of your JBC manual that you’ve got right here. Obviously, we’re kicking things off with Department of Corrections. 

Director Wallace will be here to help answer questions. Secretary Wallace be here to help answer questions. And of course, we’ve got Mr. Coleman on our team over here to kind of give some brief outlines. Here is how I would like this to work so we don’t get ourselves stuck in the mud kind of like we did at higher ed a little bit different. 

There are a number of different entities. There’s only one Department of Corrections that’s going to be here to answer questions. So what I want us to do is work through this list. If you have questions on what’s on this list when we work through it, ask them. We will be asking for executive rec, legislative rec, whatever it may be, at the conclusion of that, by section. 

So for instance, we’ll first dispose of the letter, which is G1, and then we’ll move to the corrections department. And I’ll be asking for a motion that we adopt executive rec for pages 4 through 8, okay? Then we’ll move on to the next. But if you can, limit your question to what’s in that section. And if you’ve got questions about things that are outside of what’s in that section, hold them into the end. 

And we will stay here as long as y’all want to with the Department of Corrections to answer questions that are not related to what we’re considering today in their appropriations. Does that make sense to everyone? Or does anyone have any questions on that? Again, we’re going to work through this by section. 

Keep your questions, comments limited to that section. We’ll move forward, and if there are questions outside of that– and so to answer one question that I think is coming, there is nothing about what we’re going to discuss today that has to do with capital expenditures unless it’s regular maintenance type items. 

So there is no prison funding. There is none of those items are in any of these appropriations that we’re discussing today. So if you’ve got questions about the construction of the prison for Secretary Wallace, we’re going to take those up at the end as we kind of work through this. 

This is for the current operations of the Department of Corrections and moving through to adopt appropriations for later on. With that, Senator Hill, you’re recognized for a question. 

Senator Ricky Hill Would you state which one we’re starting on, what page we are on. Because I could not hear you. 

Senator Jonathan Dismang Okay, yeah, we’re going to be on Section G, Department of Corrections. We’ll have Secretary Wallace come forward. She’s going to, I think, make some brief remarks unless she doesn’t want to, which is perfectly fine. Then we’re going to start things off with G1, which is a response to legislation that was filed in the moving of positions. And then we’re going to work through this again. 

So it’s a little bit quieter in here now. Then we are going to take things by section on what you have in front of you. So we’ll first dispose of the Corrections Department. Pages 4 through 8. We will take questions, we will have comments, we will work through that and then we will move on through. 

If you have questions that are not related to that section, hold those until the appropriate section you’re on. Or if it’s not related to anything, we will take those up at the end. I promise we will be here as long as we need to to answer questions. I just want to make sure we’re flowing through the process the best we can. With that, Secretary Wallace, you are recognized. 

Lindsay Wallace Thank you, Mr. Chairman, committee members. Lindsay Wallace, Secretary for the Arkansas Department of Corrections. I had not prepared any remarks, so I will yield to questions for you all if there are any or if there’s anything specifically you want me to address. 

Senator Jonathan Dismang All right. Perfect. Members, we’re going to move to G1. So can we have a quick– okay, you’re going to do that? Okay. You’re recognized for an explanation on G1. 

Department of Corrections Budget

Kay Barnhill Yes, sir. Kay Barnhill with Office of Personnel Management. G1 is a transfer of 51 positions from the Department of Corrections to the Secretary’s Office at the Department of Correction. 

This is to activate the recidivism program that will be put in place. These are 50 correctional corporals and one corrections deputy director that will manage that program. The cost is estimated to be approximately $4 million. 

Senator Jonathan Dismang All right, thank you. Members, do we have any questions on G1? All right. Seeing no questions, Senator Bryant, you’re recognized for a motion. 

Senator Joshua Bryant Make a motion we adopt the G1 letter.

Senator Jonathan Dismang  Motion to adopt G1. Do we have a second? We have a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. All right, members, that’s going to take us to the Corrections Department. We’re going to be working in the budget manual, pages 4 through 8, and you’re recognized for a brief presentation. 

Dalton Coleman Thank you, Mr. Chair. My name is Dalton Coleman. I’m BLR Fiscal Staff. If you’ll flip all the way to page 2 of your budget manuals with me, we’ll start our look at the Department of Corrections Division of Administration and Shared Services. So just brief totals for this division. Fiscal year 26 authorized amount is just under $209 million. And the fiscal year 27 recommendation is just under $217 million. That is an $8 million increase. 

If you look at page 4 with me, we’ll start looking at where those changes come from. This will be a common theme throughout this presentation. Mr. Chair, you’re going to hear me say Act 723 of 2025 several times. And that’s because it moved a lot of things around the Department of Correction. This is the first one.

 So this appropriation previously existed in the Division of Correction. It has now moved to the Division of Administration and Shared Services. It’s not a new appropriation. But it’s for $170,000 for the sex offender assessment. 

Our next change is on page 8 of your manuals. So there’s a couple of little differences here. One is the positional difference, and that’s from the transfer in of those sex offender assessment positions. And then the main difference is the medical contracts line item on the bottom of that table on page 8. 

There’s about a $6 million increase in that line item, and that’s for anticipated increases in contract costs. Mr. Chairman, that concludes all the change levels for administration and shared services. 

Senator Jonathan Dismang All right. Thank you, members. Do we have any questions on pages 4 through 8 of your budget manual and recommendations? All right, seeing none, what’s the will of the committee? All right. Senator Flowers, you’re recognized for a question on any item that’s 4 through 8. 

Inmate medical care

Senator Stephanie Flowers Thank you for being here. On the medical contracts, it appears the actual was 139 for this fiscal year. And has the medical contract for the department increased so that it makes sense of the legislative agency request in the executive recommendation? Do y’all have a– have you renewed a contract, medical contract?

Chad Brown Chad Brown, CFO, Department of Corrections. Senator, this is the medical contract that was discussed a couple years ago. The initial period of this contract is two years. This will be coming up for the third year renewal coming up in September. So we’re working towards that coming up in September. This is just our standard medical contract for the Department of Correction for our inmate population. 

Senator Stephanie Flowers And so you anticipate an increase in the contract?

Chad Brown Yes ma’am. So this contract’s a little weird because we had to do a three month extension. So it doesn’t line up with the fiscal years. But basically the contract gradually increases over the 10-year period. So yes, we agree with this increase. This should cover it. And then we’ll continue to bring this back before this body every year for renewal. 

Senator Stephanie Flowers I’ll just mention that from time to time, I get letters and calls from relatives of those inmates that require medical care. And sometimes, most of the time, it’s a complaint that their relative in the corrections system is not getting proper medical care. Who is the contract with? And is that the vendor that you– are you going to renegotiate with that vendor? Or is it going to be offered out and opened up for other vendors? 

Chad Brown No, ma’am. The current vendor that we have a contract with, the company name is Wellpath. We went through the RFP process. It was a long, arduous process. But once we completed it, Wellpath was the lowest vendor. That’s who we chose. We’ve been in business with them for a long time with the state. When it comes to renegotiation, that’s something I’m going to discuss with Secretary Wallace probably in the next month to see how we want to go about that. 

Senator Stephanie Flowers Well, are you aware that there are complaints? And what is the process of addressing complaints for relatives outside the system that have relatives in the system? 

Dexter Payne Senator, Dexter Payne, Director for the Division of Correction. We have a process in place that they can contact our medical department at the central office if they have complaints. If the inmate has direct complaints, he can file a grievance, a medical grievance. And we will answer that grievance for him. So we’ve got those avenues. I’ve got an assistant medical administrator right now who will also answer those questions for them. 

Senator Stephanie Flowers Okay, well, I’d like to kind of– I think it would be helpful to the whole body to know how many complaints you all are fielding in the course of a year and how many have been resolved, how many had been found not to be valid at all. 

Dexter Payne Okay. Yes, ma’am, I can get those numbers to you. 

Senator Stephanie Flowers Thank you. Thanks, Mr. Chair. 

Senator Jonathan Dismang That was perfect, Senator Flowers. Senator Dees, you’re recognized. 

County jail reimbursement

Senator Tyler Dees Quick question over here on when I look at page 6, I believe it is, on county jail reimbursements. Just seeing a flat budget, it looks like, on the recommendation. I just constantly hear of budgets related to county jails and state inmates and costs not covering housing of those inmates. Could you walk me through how we’re flat or recommending flat whenever I hear of concerns across the state? 

Chad Brown Sure, I’d be glad to. First, I want to thank Mr. Andy Babbitt behind me. He’s been a huge help with this process, and I do call it a process. What we found with county jails, we were– how do I explain this easiest? We were paying invoices from previous fiscal years. 

So when we send invoices out, the counties are not always diligent sending those invoices back to us for payment. So sometimes some of the counties would be a year late in sending those invoices back. What we have done to fix that problem, and that’s where I bring in Mr Babbit and his team, we have been meeting with the Association of Counties, the Sheriff’s Department or the Sheriff Association and we’ve gone to their conference. 

We’ve talked to all the sheriffs. They are now sending those invoices in a timely manner. So we have, since we have received this increase in funding, we have received zero complaints of not being paid. So if you receive a complaint, please let us know. Because we haven’t received any. 

Senator Tyler Dees I’m not sure if the complaints I heard were around timing of funding, but around total dollars to cover the cost of actually housing those inmates. So maybe if you could speak to that, are we adequately funding our county jails when they do have to house state inmates? 

Lindsay Wallace Thank you for the question, Senator. So the amount that is set for the county jail reimbursement is actually set by you all. So we’re just a pass through for the funding. I don’t know that all county jails are created equal. I don’t know what their expenses are. 

I know that the Association of Counties does do a report on how much it actually costs the counties. It’s $40 a day is what we pay. And that has been the amount since 2022. Before that, in 2020 it was $32, 2015 it was 30. 

And that’s legislatively set, I think with the chief fiscal officer of the state’s input. So we’re just there to pay whatever the set amount is. So that’s kind of up to you all and to the chief fiscal officer what that amount is. 

Senator Tyler Dees I appreciate that. Thanks. 

Senator Jonathan Dismang Thank you. Representative Garner, you’re recognized for questions. 

Representative Denise Garner Thank you, Mr. Chair. I’ve got a quick– here I am. I’ve got a quick follow up on Senator Flowers’ question. And I know we’ve talked about this before. But Wellpath, is there a mechanism to make sure that everything that they’re doing is up to date and research-based? And who monitors what they’re doing and how they’re doing it? Is there somebody that does that, or do we just assume they know what they are talking about? 

Dexter Payne Thanks for the question, Ms. Garner. Yes, we have a third party audit company that comes in by the name of MQRS. And they make sure that Wellpath is doing the things that they’re supposed to be doing, such as answering grievances, seeing the inmates in a timely manner, sending them out when necessary. So they make that they are doing what they’re supposed to do, along with my staff. 

Representative Denise Garner What about the actual care that they’re getting? Do we know that they are getting the most up-to-date care? I know we’ve talked about hepatitis C. Are they getting the more up-to-date care that’s research-based or evidence-based? 

Dexter Payne Yes, ma’am, I would think so. 

Representative Denise Garner Who decides that? Does that QRS, QRS program look at those kinds of things? 

Dexter Payne MQRS. Yes, they look at those types of things and then advise us. 

Representative Denise Garner They look at the actual healthcare they’re getting and the treatments that they’re getting and make sure that they are up to date and what most most physicians are doing for those particular illnesses? 

Dexter Payne Yes, ma’am. 

Representative Denise Garner Okay, thank you. Appreciate it. 

Senator Jonathan Dismang All right, thank you. Representative Wooten, you’re recognized for a question. 

Representative Jim Wooten Thank you, Mr. Chairman. My question has to do with personnel as usual. Is this shared services, is it for all of your institutions that you have? 

Lindsay Wallace No sir, those are all broken up by division. There are some positions that are specifically tied to shared services. But like Director Payne’s security positions that work at the institutions, Mr. Cheek’s positions that are working out in probation and parole, they’re in those individual budgeted areas. So you won’t see a total amount in the shared services budget. 

Representative Jim Wooten If I may, Mr. Chairman, let’s just get this out of the way, what is you total employment in everything? 

Lindsay Wallace So our total DOC positions filled as of Tuesday was 4,915 positions. 

Representative Jim Wooten 4,950?

Lindsay Wallace The great majority of those are in Director Payne’s side. 

Representative Jim Wooten How many of those are vacant? 

Lindsay Wallace Total DOC vacancies about 1,500. Some of those include unbudgeted. 

Representative Jim Wooten How many of those are over two years old? 

Lindsay Wallace I don’t know that number off the top of my head. 

Representative Jim Wooten Well, can you get that information for me? 

Lindsay Wallace Absolutely. 

Representative Jim Wooten From your last report. 

Lindsay Wallace Okay, my director over human resources here, she’s going to get us the information for you. 

Representative Jim Wooten Thank you. Thank you, Mr. Chairman. 

Senator Jonathan Dismang All right, thank you. Representative Richardson, you’re recognized for a question. 

Representative Jay Richardson Thank you, Mr. Chair. I wanted to follow back up with something that you just said up there. You said that the counties or jails that are– excuse me, you said that you hadn’t been receiving invoices. 

And that’s surprising to me because I know there have been jails who’ve been complaining about funding and not getting money. So I’Thank you. Thank you, Mr. Chairman. I’m surprised that they’re not sending in invoices to get paid. Do you know how many of those actually were not sending it? 

Chad Brown No, sir. We send a quarterly report to the Association of Counties and they send that. They’ve been sending out emails to the counties that have been late on sending back their invoices. I think right now, if I had to guesstimate a number off the top of my head, I think we’re about half a million dollars still hanging out there to be paid from the previous fiscal year. 

Representative Jay Richardson Okay, and no idea what parts of the state that’s coming from. 

Chad Brown We do, I just don’t have that in front of me. I can provide that to you if I need to. 

Senator Jonathan Dismang  All right, thank you. Members, do we have any other questions on pages 4 through 8? All right seeing none, I need a motion to adopt the executive rec for the juvenile sex offender assessment, county jail reimbursement and Department of Correction. I’ve got a motion. I’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. We’re going to work through the Division of Correction now. 

Division of Correction

Dalton Coleman If you’ll turn to page 10, you’ll find the appropriation summary for the Division of Correction. Luckily, we’ll be able to stay on this page for the entirety of the division presentation because all of these changes within this division are due to Act 723 of 2025. We have reallocations out, reallocations in. The only reallocation out– we already talked about it– is the ADC sex offender assessment that went to the Division for Administration and Shared Services. 

There are three reallocations into the Division of Correction, the first on the inmate care and custody line item. So there’s an increase of about $43 million there from fiscal year 26 authorized. That’s due to Act 723 relocating the residential services programs from the Division of Community Correction into the Division of Correction, and that’s the appropriation that those are housed in. 

The last two are inmate welfare treasury cash and non-taxed revenue receipts. Inmate welfare treasury cash increases by about $3 million and non-taxed revenue receipts increases by $1 million. And those are just reallocations from the residence cash treasury appropriation and the Division of Community Correction. 

The totals for the Division for Correction go from $437 million in fiscal year 26 to $483 million in fiscal year 27. But none of that is new appropriation, so all just re-allocated due to Act 723. Mr. Chairman, I’m happy to answer any questions. 

Senator Jonathan Dismang Members, if we have any questions– Senator Tucker, you’re recognized for a question. 

Senator Clarke Tucker Thank you, Mr. Chair. Will you just explain one more time what’s being moved from Community Correction to Corrections? 

Dalton Coleman Yes. So the inmate care and custody line item that you see in this division, the residential services programs are moving to that appropriation. And then the residence cash treasury is moving to the inmate welfare treasury cash and non-taxed revenue receipts line items on this table. 

And the inmate welfare treasury cash is, I believe, the appropriation for the commissary related things. And then the non- taxed revenue receipts is their phone service. 

Senator Clarke Tucker Okay. The first program you mentioned, the resident welfare program– 

Dalton Coleman The residential services program?

Senator Clarke Tucker Residential services program. What is that? 

Chad Brown Senator, let me take this off Dalton’s plate for him. So what we did is we transferred on the Community Correction side of the house, which is our pro and probation mostly side of the house. They had some, what we call residential facilities, basically secured facilities. Secretary Wallace wanted to move all secured facilities over to Director Payne’s side of the house on ADC. So that’s essentially what we did to the tune of about $46 million. 

Senator Clarke Tucker I guess that is– so the Community Correction facilities, for example, Secretary Wallace, where we have the intermediate sanction programs, those were moved from Community Corrections to the Division of Corrections? 

Lindsay Wallace Yes. The oversight is with Director Payne’s side of the house now. There’s no change in the program at this time. We just moved the facilities. There’s more resources with cash funds, things like that. And security is security. So we put it with the security side of that house. The programming aspect, we have a director of programming now that kind of oversees the programming for everything. So it made more sense to put those there. 

Senator Clarke Tucker Okay, so Community Correction really just consists of parole and probation at this point? 

Lindsay Wallace Yes, sir. And they have oversight of the sex offender community notification assessments as well now. So we pushed that over. That was previously housed with Director Payne. So sort of management of those services where the sex offender assessments, a lot are out in the community, things like that, that’s also under the Community Corrections.

Senator Clarke Tucker So what are we going to call the Community Corrections facilities if they’re not–

Lindsay Wallace They’re still community correction centers. They’re just under the oversight of the Division of Correction. 

Senator Clarke Tucker Thank you. And then my other question is about the G1 letter that Ms. Barnhill mentioned. Those are, how many positions are there going to be in the recidivism program established by Act 723? 

Lindsay Wallace So the recidivism reduction system actually allowed us to reclassify up to 100. We’re starting with 50. I didn’t want to take more security positions at this point than I knew we were going to need. The act requires there to be at least one, I think, reentry specialist is what the act said, at each facility. 

So we’re starting with, I think there’s about 40 positions that we created. Some of those are in kind of the oversight aspect of that. One is a director of what that recidivism reduction reentry system looks like. There’s some sort of statewide monitoring. And then those individual, I think, 28 positions to start off at each facility. 

And then there is some additions of a couple of positions in, it’s our quality improvement, quality assurance, so a program assessment and oversight area that we added to that. So I can’t remember off the top of my head. It’s 41 or 42 positions that those 50 will create. 

Senator Clarke Tucker And how is that going? How far are we into that process? 

Lindsay Wallace So we really need those positions to kick off what that development actually looks like. But I think we’ve already made quite a few strides in changing sort of the approach to reentry and our recidivism issues in the state. One, we just had the Future Fit graduation, which was sort of a new pilot program with workforce development. 

We’ve partnered with DFA to come in, look at child support obligations, sort of those reentry barriers. We’ve graduated 18 folks out of that initially. We’ve got another cohort going now and they start immediately after we finish those. 

Beyond that, we are also looking at starting a peer recovery academy so that we can have sort of that lived experience with our offenders that are incarcerated that can help us with programming. I think that’s twofold for them. That will allow them, if they go through the academy and complete all of their peer groups, will allow them to get a certificate, which benefits them once they get out of incarceration. 

But then once they get that certificate, then they can help us with our programming as well. So we can train them to help us present programs to the inmate population. In addition to that, we have– I don’t know if you all have been. I know some of the ladies in the room have been over there. We have a new women’s health unit where we’re addressing recidivism with them. 

We’re addressing familial connections and sort of that bonding. The Protect Act required us to create a bonding period with mothers and babies, and so that’s where we’re facilitating that. 

So beyond that, we implemented the Ohio Risk Assessment Tool, which is an assessment tool that helps us make sure we get the offenders what they need when they come into us. We’re working through getting those assessed. The Recidivism Reduction Act actually anticipated us not being able to get this into complete fruition until, I think, the end of this year. 

So right now we, at the last count that I got at the end last month, we had about 9,000 assessments remaining for our incarcerated population. And that’ll help us develop any additional programming that this reentry, recidivism reduction system will implement eventually. 

Senator Clarke Tucker Those Ohio assessments, you’ll be doing those when people enter the system? 

Lindsay Wallace Yes. And they get reassessed. It requires reassessment periodically throughout their incarceration when a triggering event happens. Yes, sir. 

Senator Clarke Tucker Those positions for the recidivism reduction program, can you not fill those until we approve this?

Lindsay Wallace I think that would be helpful. We’ve been working with Kay and DFA and trying to work through what that would look like. But we first had to convert the 50 positions into my area, I guess, so that we could. Because that was also something that the act required was that it be created within the office of the secretary. So I don’t know what all of the specific steps are. But yes, sir. 

Senator Clarke Tucker All right, thank you so much. 

Lindsay Wallace Yes, sir. 

Senator Jonathan Dismang Thank you. Representative Beaty. 

Representative Howard Beaty Thank you, Mr. Chair. I’m over here. Kind of focused on page 11 on the work release, you mention in here over 500 inmates in the program. Do you have the average number of inmates that participate in the work-release program and a breakout between those centers? 

Dexter Payne Representative Beaty, there’s probably close to 800 that participate at any given time. It fluctuates at the facilities, depends on the jobs that are available. 

Representative Howard Beaty Well, I think that’s kind of where I was going with my question. In your document that’s prepared here for us on the budget, it said over 500. 800 is kind of a step above 500 in there. But I’d like average numbers and also to see justification for those five centers where those inmates are in the state, if we can get that later. 

Dexter Payne Yes sir, we’ll get it to you. 

Representative Howard Beaty All right, thank you. 

Senator Jonathan Dismang Senator Flowers. 

Senator Stephanie Flowers Thank you, Mr. Chair. I’m looking at the medical monetary sanctions, receipts, and budget requests. So is that part of this contract that you spoke of with Wellpath that they reimburse or pay to offset for services not rendered or anticipated?

Chad Brown Yes, ma’am. So during the negotiation of this contract, we upped our performance for them. And if they don’t meet that performance, then they essentially write us a check. That check goes into this fund, the medical monetary sanctions fund. 

Senator Stephanie Flowers Well, how much have you been getting back? Can you put that in a percentage or what? And I would think that that would kind of indicate, maybe work along with assessing and reviewing complaints by inmates or relatives of inmates that are complaining that their relative in the system is not getting proper medical care. I just kind of want to know, how much are you getting back? 

Chad Brown So Senator, it looks like in FY25, it was around 690,000. But I can get back, let me get back to the office and I can give you a couple of fiscal years of what that looks like to give you a better idea. 

Senator Stephanie Flowers Okay, I think it would be helpful just to have a kind of a history and helps to understand when we get complaints what we can say to constituents or relatives of these inmates that are complaining about health care. You understand what I’m saying? 

Chad Brown Yes, ma’am. I’m pretty sure that those performance requirements are broken down in the contract and I’ll be happy to get that for you. 

Senator Stephanie Flowers I really am stressing this because I’ve received too many calls and letters about inmates not getting medicines or proper care. Thank you, Mr. Chair. 

Senator Jonathan Dismang Representative Wooten, you’re recognized for a question. 

Representative Jim Wooten Thank you, Mr. Chairman. You mentioned 1,500 vacancies. Madam Secretary, of those 1,500, how many of those are security personnel? 

Lindsay Wallace The number that I have on my sheet for the Division of Corrections is 1,290. 398 of those are unbudgeted. 

Representative Jim Wooten 398?

Lindsay Wallace 398. 

Representative Jim Wooten This may be a question for Mr. Payne. Has the increase in pay helped in recruiting any at all? 

Dexter Payne Yes, sir. Definitely has helped. Our vacancy rate dropped tremendously after that pay plan was implemented. So, yes, sir, it definitely helped. 

Representative Jim Wooten It’s just a matter of turnover is the reason you got 398? Or do you not have the funding to pay all of them? 

Dexter Payne Those positions, those 398 are unbudgeted. So, yes, sir, we don’t have the funds to pay the 398. 

Lindsay Wallace If I can clarify that that 1,290– thank you, Sonya, for the clarification– that I gave you, it’s not just security. That’s overall numbers. Yes, so that would include any sort of programming. We talked about some of the positions not being in the shared services area. So programming staff, if he has a chaplain that’s vacant or anything like that, those will fall in that total vacancy number that I mentioned. 

Representative Jim Wooten Of the 398?

Lindsay Wallace The total 1,290 minus the 398.

Representative Jim Wooten 1299? Okay. But the increase in compensation for the security people has helped you recruit? 

Dexter Payne Yes, sir. 

Representative Jim Wooten Okay, I’ve got one more question, Mr. Chairman. On page 10, item 2, the recommendation in the legislative and the executive recommendation is 529 million. That’s an increase of 46 million from the budget. So that’s a request for new money? 

Lindsay Wallace Yes, sir. That’s to cover the increases in our– and that was what Mr. Hudson presented in his balanced budget. Yes, sir, the $40 million, I think, is to help us with our salaries from the increases with the pay plan, the majority of which were security. And then I think 5 to address the medical contract. And we’ll utilize medical sanctions. 

Representative Jim Wooten You mentioned salary increases in that 46 million. When we changed the compensation plan last time, did you estimate out in front of you 4 or 5 years of what your cost would be? Or is this just an every year situation? 

Chad Brown Well, Representative, I don’t go that far out. I really work on bienniums, bienniums and fiscal years. So I try to stay within the biennium. We keep in contact with DFA and work closely with them on our numbers so they know our numbers just as well as we do. If anything comes up and a red flag comes up, we have those discussions and we try to find solutions at that time. 

Representative Jim Wooten Thank you. Thank you, Mr. Chairman. 

Senator Jonathan Dismang All right, thank you. Members, I think that wraps up questions on the Division of Correction. What’s the will of the committee? We’ve got a motion for exec rec. We’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. We’re going to move to community correction. 

Dalton Coleman Thank you, Mr. Chair. On page 32, you’ll see the breakdown of the appropriations for the Division of Community Correction. Some quick totals. Fiscal year 26 authorized for the Division of Community Correction is around $142 million. And the fiscal year 27 recommendation is just over $93 million. 

And Mr. Chairman, those changes are what we just talked about with the Division of Correction. They’re just those transfers out for those programs that we mentioned before. So residence cash treasury goes from about $3.6 million to $0. And Community Correction state appropriation goes from $123 million to about $78 million. Those are all related to the transfer to the Division of Correction. Happy to answer any questions.

Senator Jonathan Dismang All right. Thank you. Members, do we have any questions on pages 34 through 40? All right, seeing no questions, what’s the will of the committee? We’ve got a motion for executive rec. We’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. Post Prison Transfer Board. 

Dalton Coleman Thank you, Mr. Chair. So the fiscal year 26 authorized amount for the Post Prison Transfer Board is around $2.4 million. The recommendation for fiscal year 27 is right about the same. There are no significant changes to the Post Prison Transfer Board. I’m happy to answer any questions. 

Senator Jonathan Dismang Members, do you have any questions on the Post Prison Transfer Board? That’s page 44. All right, seeing no questions, what’s the will of the committee? We’ve got a motion to adopt executive rec. We’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. Correction Department sentencing. 

Dalton Coleman Thank you, Mr. Chair. Our total cost for– or sorry, total authorized amount for fiscal year 26 for the Sentencing Commission is $475,757. That amount is the exact same for the fiscal year 27 recommendation. There are no significant changes. I’m happy to answer any questions. 

Senator Jonathan Dismang All right, thank you. Members, do we have any questions on Correction Department Sentencing, page 47? Seeing none, what’s the will of the committee? We’ve got a motion to adopt executive rec. We’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. 

Members, as promised, if you have questions that were not part of the appropriation process that we went through, go ahead and hit your mic and you’ll be welcome to answer or ask those. Any other questions for Department of Corrections that would have been outside of what we covered earlier? 

All right, seeing no questions, thank you all very much. I think we need– okay, yeah. Ms. Barnhill, I think it’s your time. We’re going to move on to section H. We’ll do these one at a time. And with that, if you could just recognize yourself for the committee, provide a brief explanation, and then we’ll open up for questions. And again, we’ll do H1, then H2, then H3. 

Kay Barnhill Yes, sir. Kay Barnhill with Office of Personnel Management. 

Leslie Fisken Leslie Fisken, Secretary, Shared Administrative Services. 

Kay Barnhill H1 is letters that we have submitted to the committee that reflect actions that the departments have taken so far this fiscal year. These are all positions that have been approved by the Personnel Committee and reviewed by Legislative Council. We’re taking this action so their appropriation bills can be updated accordingly. 

Senator Jonathan Dismang All right, thank you. Members, any questions on H1? All right, seeing no questions, we need a motion to adopt. We’ve got a motion. We have a second. We’ve got a second. Any discussion on the motion? Seeing none, all those in favor, signify by saying aye. All those opposed? Motion carries. H2. 

Kay Barnhill H2 reflects pool positions that have been approved for the various departments throughout this fiscal year up to date. Again, all these actions have been approved by the Personnel Committee and the Legislative Council. Again, this will update the appropriation bill so they can be drawn up accordingly. 

Senator Jonathan Dismang All right, perfect. Members, do we have any questions on H2? Seeing no questions, what’s the will of the committee? I’ve got a motion to adopt. I’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. H3. 

Kay Barnhill H3 is part of the Arkansas Forward Initiative for the centralization of some of the services, shared services for departments. These reflect positions that have been transferred from the various departments to the Office of Personnel Management, the Office of State Technology, and the Office of State Procurement. 

Senator Jonathan Dismang Thank you. Members, do we have any questions on H3? I think I’m there. Yeah, H3. All right. Seeing no questions, what’s the will of the committee? We’ve got a motion to adopt. We’ve got a second. Any discussion on the motion? Seeing none, all those in favor signify by saying aye. All those opposed? Motion carries. 

Thank you very much. Members, we’re going to be back here tomorrow morning. It’s going to be my co chair’s turn. Thankfully, he’s going to cover DHS public school fund, Public Safety and Department of Health. Is there any other– that was it. That was it. With that, we’re adjourned. We’ll see you tomorrow at 9 a.m.