Governor Sanders Delivers Her Balanced Budget

LITTLE ROCK, Ark. - Governor Sarah Huckabee Sanders today presented her balanced budget to the legislature, emphasizing her administration's continued investments in education, public safety, and healthcare, while also holding the line on the out-of-control growth of government to leave room for future tax cuts.

"This year's balanced budget continues my administration's record of fiscal responsibility on behalf of the people of Arkansas, making investments in key priorities while still holding the line on the growth of government to provide room for tax cuts," said Governor Sanders. "I'm excited to work with our legislature to make these investments in education, public safety, healthcare, and more, and when we pass this budget, I'm confident we'll be able to cut taxes and continue to lower costs for Arkansans."

"Since taking office in 2023, Governor Sanders' budgets have been people-focused and fiscally conservative," said Secretary of the Department of Finance and Administration Jim Hudson. "Through her leadership, we have reduced income tax rates by over 25%, increased our reserves to almost $3 billion (one of the highest in the nation), and funded key programs that are important to so many Arkansans. This budget builds on that approach, with responsible investments in health care, education, and public safety, while continuing to reduce Arkansans' income taxes. DFA looks forward to working with the Governor, members of the General Assembly, and leaders across state government on this budget."

"Governor Sanders is investing in what we already know is working in education," said Secretary of Education Jacob Oliva. "This budget builds upon the foundation of LEARNS and ACCESS while continuing to empower families, increasing access to high-quality early learning programs, and ensuring higher education institutions offer degrees that prepare students for success in life. The Arkansas Department of Education is proud to work with a Governor who puts students and families first."

"We are grateful for the Governor's balanced budget proposal. This plan provides critical resources our agency needs to strengthen operations at our Human Development Centers, support families on the CES Waiver and the waitlist, and support the long-term sustainability of Medicaid for those who need it," said Secretary of the Department of Human Services Janet Mann. "By also reinforcing our teams in County Operations, Youth Services, and Children and Family Services, this budget allows us to better protect vulnerable children and adults while building a stronger, more efficient state. DHS will continue identifying internal efficiencies and ensuring our Medicaid dollars are being spent correctly and on those clients who need services the most."

"Agriculture is Arkansas' largest industry, and today's balanced budget demonstrates Governor Sanders' commitment to making strategic investments that strengthen our state's future," said Arkansas Secretary of Agriculture Wes Ward. "Water is one of Arkansas' most valuable resources, and protecting it requires long-term planning and action. The Governor's leadership in updating the state's water plan, coupled with this $50 million investment to advance its recommendations, will help safeguard water resources, support economic growth, and ensure Arkansas producers, businesses, and families have access to reliable water for years to come."

The Governor's executive recommendation provides for a $311,625,372, or 3.94%, increase over last year's budget, totaling $6,969,073,258. Last fiscal year, Arkansas recorded a state surplus of $655 million, one of the highest in state history. In the first four months of this fiscal year, state revenues exceeded forecasts by more than $150 million, with October revenues alone exceeding forecasts by $45 million. The forecast was also revised up to reflect higher state revenues.

Governor Sanders' proposed investments include additional funding for early childhood education, an investment in operations at the state's Human Development Centers (HDCs), an expansion of services offered to Arkansans on the Community and Employment Support (CES) Waiver waitlist, and an investment in the state's Education Freedom Account program, created by Governor Sanders' LEARNS Act. A total breakdown of proposed investment increases is below.

• $150 million investment in Medicaid, including providing supportive living services for those on the CES Waiver waitlist
• $70 million investment in Education Freedom Accounts
• $25 million investment in the Division of County Operations, to provide for Supplemental Nutrition Assistance Program (SNAP) administrative costs
• $20 million investment in early childhood education
• $9 million investment in institutions of higher education, to reflect increases in institutions' productivity
• $6.1 million investment in the Division of Developmental Disability Services, to fund operations at HDCs.
• $4.4 million investment in the Division of Youth Services, to fund operations
• $1.5 million investment in the Crime Information Center, to ensure law enforcement is provided with accurate, real-time data
• $1.5 million reallocation from Fair Funding to Children's Advocacy Centers to support their work caring for vulnerable children
• Targeted restoration of FY27 Category B funding, including:
  • $9.8 million investment in the Division of Children and Family Services
  • $4.6 million investment in the Division of Developmental Disability Services
  • $3.7 million investment in the Division of Youth Services
  • $2 million investment in Municipal Aid
  • $1.5 million investment in County Aid
  • $970k investment in Rehabilitation Services and the Division of Services for the Blind

Additionally, the Governor identified the following priorities be funded through one-time surplus funding:

• $200 million investment in Medicaid Sustainability
• $50 million investment in support of the State Water Plan
• $50 million in funding for the state's potential SNAP benefits share
• $50 million investment for HDCs

The Governor is also directing $75 million in interest earnings annually to Medicaid.

Governor Sanders' letter to the legislature is linked here.

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