What Is a Fiscal Session and Why Should You Care?
The Arkansas General Assembly meets in odd-numbered years for each regular session where they draft, file, and vote on new legislation from a variety of topics. They will pass laws during these sessions covering everything from healthcare policy to tax reform all the way to technical language corrections that clean up the Arkansas code without substantively changing a law’s meaning.
It is in this fiscal session where a lot, if not most, of policy work, gets done. However, the Arkansas state constitution also requires a fiscal session to be held in even-numbered years. This session, while not as wide in scope, is still critically important from both the state’s perspective as well as private industry because it is where the new annual budget is passed.
The fiscal year runs from July 1 of each year through the end of the following June. At the end of the regular legislative session, a budget is passed, but since it only runs through the following June, Legislators reconvene in the required fiscal session to pass a new budget for the following fiscal year. During this session, the General Assembly is only authorized to pass budget-related bills, so other policies are not taken up at this time.
This is relevant for state agencies, private businesses, and the common taxpayer because it governs how state dollars are spent.
Arkansas also requires the Governor to submit a balanced budget to the legislature for approval. Ensuring that money is appropriated correctly and the revenue forecasts are accurate is vital. If they aren’t, it will leave some programs underfunded. This can impact not only the state but a business that it contracts with or is paid by the state.
For example, healthcare facilities are often paid through Medicaid or other state programs. Ensuring there is money budgeted for programs like these is vital not only for the state but for the businesses that rely on them as the payor. It also can have an effect on the recipient of the healthcare services who relies on that program to cover or share in the cost of care.
Ultimately, Arkansans can rest easy knowing we have a legislature that is not only conservative but responsible as well.
With Governor Hutchinson working with the General Assembly, we can expect more of what we have seen in recent years- effective tax cuts in the regular legislative sessions followed by responsible budgeting that continues to put Arkansas in a more competitive position.
Regardless of how likely this positive outcome is, the JCD team will be working with legislators throughout this process to ensure quality outcomes for our clients.