Tuesday, Jul 1, 2014
Special Session to Address Lingering Financial Issues
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LITTLE ROCK - The problems being addressed by the legislature in this summer's special session have been building for years.
Consistent and sharp increases in health insurance costs have been a growing problem for public school employees for more than a decade. For even longer, dramatic increases in the inmate population have caused budget problems for lawmakers and officials of the state Correction Department, which operates state prisons.
In 2001 the legislature took from the state Board of Education the authority to set contribution levels, and that same year lawmakers set the minimum contribution by districts at $114 per month. That minimum went up to $122 in 2003 and to $131 in 2004. In the 2013 regular session the legislature increased the minimum contribution for districts to $150 a month.
In 1998 the Board of Education voted to provide school districts with an additional $12.4 million from state reserve funds in order to lessen the impact of steep increases in health insurance premiums.
In the 2005 regular session the legislature voted to add $35 million for public school employees' health insurance. In 2007 the legislature voted to again provide the $35 million for health insurance.
Health insurance costs continued to rise, and in 2008 the legislature began studying the possible joining of state employees and school employees into a single system.
In 2009 the legislature added another $15 million a year to school health insurance. Combined with the $35 million that was approved initially in 2005, the additional contribution of $15 million brought the total to $50 million annually that the legislature approved for school health insurance. That amount was in addition to the foundation funding that the state provides school districts for an adequate education system each year.
In a special session last October, in order to avoid enormous projected spikes in health insurance costs for school staff, the legislature used $43 million from various sources to hold the premium increases to 10 percent.
Now, school employees are facing 35 percent increases in health insurance premiums next year. Rather than continue to pour money into the system, the legislature is considering structural changes such as removing part time employees and spouses of employees.
The budget for the state Correction Department has steadily increased in proportion to steady growth of the inmate population. This year the operating budget for prisons will exceed $310 million in state general revenue funds, compared to about $210 million ten years ago.
Ten years ago the inmate population was about 13,000 and now it is more than 17,000. The cost of housing inmates includes treatment for mental illness and drug abuse. The Correction Department has more than 4,000 employees.
During the special session, the legislature will consider adding $6.3 million to the prison's budget in order to add space for 600 new beds.
About 400 inmates work on prison farms and about 500 inmates work in prison industries. Products made by inmates include stationary and printed materials, janitorial supplies, vinyl products and furniture. They also refurbish school buses and upholstery.
The prison farms produce a broad variety of crops. Inmates manage a herd of more than 2,000 head of cattle, as well as swine and poultry.