Nevada County Picayune and Gurdon Times Newspaper Archive

Arkansas ends fiscal year broke, AASIS in trouble

Arkansas, in effect, ended its fiscal year broke after a special session had to be called in June to find $56 million to shore up budget shortfalls.

State Sen. Percy Malone said the legislature found the money to bail the state out if its fiscal problems as the end of its financial year by raiding various funds to cover the deficits.

Under the state's constitution, Arkansas must operate on a balanced budget annually.

However, Malone said, the state doesn't have the money to be bailed out again.

But, the situation may occur again for the 2003-2004 budgeting session if Arkansas Gov. Mike Huckabee bases the budget on a projected 4.8 percent growth in state revenue.

Malone agreed the economic indicators show there will be a growth in the state's revenue, but his estimates are more conservative at 2.5 percent.

He said if the first six months of 2003 are flat with the projected growth, it would mean the second half of the year would have to have a 9.8 percent spurt to meet the proposed budget.

Along with the revenue projections, Malone said the legislature is also concerned with the possibility the Arkansas Administrative Statewide Information System (AASIS) may have over billed by $20 million, which will have to be repaid to the federal government. This is money the state hasn't got at this time.

"I tried, in the hearings, to find out the status of AASIS," he said.

Malone said he wanted to know what the system actually cost Arkansas, what it will cost to make it functional and work right. One such estimate, he said, is $100 million to get AASIS in proper operational order.

This would mean the computer system would cost the state approximately $150 million, as Arkansas's taxpayers paid about $50 million to buy it.

Huckabee pushed the purchase of the AASIS system through the state legislature several years ago. Since then, AASIS has been wrought with problems, including not paying state personnel or getting child support payments mailed out in a timely manner.

"We need to decide what we can do," Malone said. "The administration and legislature needs to work together."

At this time, he said, the AASIS system is a huge issue and a big undertaking, but the legislature needs to have accurate information to know how to proceed for the state.

Malone expressed concern about e-mails sent by members of Huckabee's staff which were critical about members of the House and Senate.

Huckabee, he said, claimed the e-mails were taken out of context, and promised to work more closely with the legislature.

"I hope he'll work more closely with us," Malone said, "and give us the information he has so we can run the state the best way possible.

"One reason he wanted to move to a statewide accounting system was to have a performance-based budget so we could set guidelines for state agencies and departments."

This, though, hasn't happened as planned, as the AASIS system has been plagued with problems since being placed on-line.

Now, Malone said, the legislature has to begin planning the budget for the next two years. The budget committee will meet in the fall and present its proposition to the entire assembly when it convenes in January, 2003.

"We need to get ready for the budget cycle and not have to be concerned with the numbers we're dealing with as we prepare the budget. We need accurate numbers. This doesn't need to be political. It's way too important to be political."

The AASIS system is under Department of Information Services (DIS).

According to information Malone had, the DIS was credited for $1.6 million in Nov., 2000 for the system, then borrowed another $4.2 million from the revenue stabilization act trust fund, to be paid back over five years, then obtained an advance of $2.5 million for other items, along with taking $1.8 million from the DIS revolving fund for AASIS.

The administration, he said, denied doing this in a Dec. 5, 2000, meeting, then contracted to hire a legal firm out of Washington, D.C.

"I asked why we needed attorneys if this was an accounting issue," Malone said, "and was told they (the administration) wanted legal advice and was assured then the funds weren't used to pay for AASIS, and it was over billings returned.

"Now, the federal government alleges we (the state) owe approximately $20 million for over billing."

Malone said the legislature has major challenges facing it in its next session, including restoring cuts to some departments and making sure there is money available for the state's nursing homes.

"We've got to get money back into the scholarship fund, education and state prisons, so we can get inmates out of the county jail and not have to turn them loose.

"I was disappointed in the tone of the e-mails," he continued, "about the relationship with the legislature and trust. We must work together. There has to be trust. I'll continue to do my best to work with the administration and legislature to solve these problems."