Sanders' budget proposes increases to Medicaid and school vouchers
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Gov. Sarah Huckabee Sanders speaks at an event this summer. Photo: Worth Sparkman/Axios
Gov. Sarah Huckabee Sanders proposed a $6.97 billion general-revenue budget to lawmakers Friday, increasing spending by 3.94% with the biggest boost going to Medicaid.
Why it matters: The spending priorities shift toward health care and disability services while maintaining Sanders' commitments to school vouchers with a $70 million increase to Education Freedom Accounts (EFAs).
- The budget leaves room for a fifth income tax cut under her administration, she said.
Flashback: Lawmakers in September approved the Department of Education's request to use $70 million in one-time reserve funding for EFAs in fiscal 2027.
State of play: Sanders' proposed budget, an increase of $311.6 million, would take effect in fiscal 2028, which begins July 1, 2027, and remain nearly flat for fiscal 2029.
By the numbers: The Department of Finance and Administration forecasts a $449.6 million surplus in fiscal 2028, not including another potential tax cut.
- Arkansas is projected to end this fiscal year with a $581.7 million surplus.
Health care
The biggest increase in the proposal is for Medicaid, which would receive $150 million in additional general revenue.
- The proposal also sets aside $200 million in one-time surplus money for Medicaid sustainability, and Sanders proposes allocating $75 million in interest earnings to Medicaid annually.
- Part of the recurring increase would cover an estimated $34 million annual cost to provide supportive living services to people on the Community and Employment Support waiver waitlist.
Education
Annual funding for the school voucher program would be set at $379.5 million after the proposed increase.
- Sanders said more than 50,000 students are participating in the program, up from nearly 45,000 the year before.
- The proposal also includes $20 million in recurring money for early childhood education, but spending details aren't finalized.
Other priorities
The proposal adds $25 million for the administration of the Supplemental Nutrition Assistance Program, formerly called food stamps, and sets aside another $50 million in case Arkansas must cover a share of food benefits.
- The Arkansas Crime Information Center would receive $1.5 million for real-time law enforcement data, while prison funding would remain flat.
The other side: State House Minority Leader Rep. Andrew Collins (D-Little Rock) told Axios via email that funding early childhood education and health care would be a positive start.
- "However, these modest changes are not nearly enough [to] make pre-K accessible statewide nor shore up our broken health care system … this budget lavishes $380 million on vouchers, and another tax cut for top earners is the wrong priority when everyday Arkansans are struggling with high costs," he said.
What's next: Lawmakers will take up the budget during the 2027 legislative session, which is scheduled to begin Jan. 11.