LITTLE ROCK —Lawmakers are expected to give final legislative approval Monday to a nearly $5.5 billion state budget before bringing to a close the regular business of the session and going home.
The House and Senate also could give their final yea or nay to bills on topics such as taxes and medical marijuana before gaveling out Monday.
Legislators will return to the Capitol for formal adjournment of the session no later then May 5, with the interval giving them time to correct mistakes in bills and try to override any gubernatorial vetoes.
On Friday, the House and Senate approved matching versions of the Revenue Stabilization Act, the bill the Legislature and governor must approve each year to set the budget and spending priorities for the next fiscal year. On Monday the chambers are expected to give approval to each other’s bills and send the legislation to the governor.
The budget, which proposes to increase spending by $163 million from the previous year, is coming up for approval slightly ahead of the release of the monthly revenue report for March. Gov. Asa Hutchinson and state’s fiscal office say the report will show a dip in revenues.
In the Senate on Friday, Sen. Bryan King, R-Green Forest, questioned the wisdom of deciding on a budget now. He noted that the governor has said he plans to call a special session on Arkansas Works, the state’s Medicaid expansion program, probably in May.
“I think there’s a value in waiting,” he said. “If we wait till the special session and we put the vote on this budget bill off for a couple months, we can get at least two, maybe three more revenue reports and we can make a better informed decision,” he said.
Sen. Larry Teague, D-Nashville, said later in an interview, “His point that we don’t know where we’re at on revenue is valid, because supposedly we’re going to be down some more next month. But the way we write revenue stabilization, it’s set up so that the governor can cut back on those things and not spend more than we have. While his point’s valid, I think the system works very well.”
The Revenue Stabilization Act divides spending into categories, with Category A being essential items that are funded first, Category B being items that are funded only if everything in Category A is funded, and Category C being a wish list of items that could receive funding if everything in the other categories is funded. This year’s budget bill proposes to fund everything in the A and B categories.
The ranked categories aid in meeting the requirement in the Arkansas Constitution that the state not spend more than it takes in each fiscal year.
Internet sales tax
The House could vote Monday on Senate Bill 140 by Sen. Jake Files, R-Fort Smith, a measure aimed at collecting sales taxes on online purchases in the state.
The bill was stalled for more than a month in the House Revenue and Taxation Committee before being passed out Thursday. If it passes Monday in the House, it will go back to the Senate for concurrence in a House amendment, which would require that chamber to suspend its rules in order to complete the process in one day.
As originally filed, the bill would have required an out-of-state seller with no physical presence in Arkansas that sells more than $100,000 worth of products or makes at least 200 transactions in Arkansas in a calendar year to begin collecting sales taxes on purchases in the state.
The bill cleared the Senate in that form, but it later was amended in the House tax committee to allow a seller either to collect the tax or to report purchases to the state for tax collection purposes and notify customers in Arkansas that they are required to pay a tax to the state on those purchases under a previously existing — though little followed — state law.
The largest online seller, Amazon, agreed earlier this year to begin collecting sales taxes in Arkansas, and it said last Monday it will begin collecting sales taxes in all 50 states. Many other online sellers are not collecting taxes in Arkansas, however.
Supporters say the bill is not a new tax because state law already requires people to report and submit taxes on their online purchases. They say the bill is needed to put brick-and-mortar stores that must collect sales taxes on a level playing field with online sellers.
Opponents say the bill amounts to a new tax because most Arkansans are not voluntarily paying taxes on their online purchases now. Some also question whether it is constitutional.
The Senate could vote a second time Monday on HB 1371 by Rep. Douglas House, R-North Little Rock. The bill would require that a person applying for a license to operate a cultivation facility or dispensary be an Arkansas resident who has lived in the state for the past seven years. People owning at least a total of 60 percent interest also would have to have been state residents for seven years.
A license for a dispensary or cultivation facility could only be issued to a person, not a corporation, under the bill.
The bill failed in the Senate last week in an 18-11 vote, falling short of the 24 votes needed for passage. Because it would amend the constitutional amendment voters approved in November to legalize medical marijuana for people with certain health conditions, it needs a two-thirds vote to pass.
The House could give final legislative passage Monday to House Bill 1580 by Rep. Douglas House, R-North Little Rock, which would impose a 4 percent tax on sales of medical marijuana. The tax would apply to all sales, including sales to dispensaries and sales to patients.
Both chambers have approved the bill, but the House must concur in a Senate amendment before the measure can go to the governor’s desk.