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Governor says Arkansas faces $353M shortfall due to virus

March 24, 2020 GMT
Gov. Asa Hutchinson, right, speaks along with Larry Walther, middle, Secretary of the Department of Finance and Administration and Jake Bleed, state budget director, Monday March 23, 2020 in Little Rock about the state's budget shortfall during a daily press conference in Little Rock. Arkansas faces a $353 million budget shortfall because of the economic fallout from the coronavirus outbreak. (Staton Breidenthal/The Arkansas Democrat-Gazette via AP)
Gov. Asa Hutchinson, right, speaks along with Larry Walther, middle, Secretary of the Department of Finance and Administration and Jake Bleed, state budget director, Monday March 23, 2020 in Little Rock about the state's budget shortfall during a daily press conference in Little Rock. Arkansas faces a $353 million budget shortfall because of the economic fallout from the coronavirus outbreak. (Staton Breidenthal/The Arkansas Democrat-Gazette via AP)

LITTLE ROCK, Ark. (AP) — Arkansas faces a $353 million budget shortfall because of the economic fallout from the coronavirus outbreak, Gov. Asa Hutchinson said Monday.

Hutchinson announced the shortfall as he said the state was delaying its filing and payment deadline for individual income taxes from April 15 to July 15, mirroring a move by the federal government. The governor said most of the state’s projected drop in revenue will come from that move, and officials had already expected $160 million less coming in because of the outbreak’s impact on businesses.

“It is going to be a challenge for the next three months,” Hutchinson said.

Health officials announced the number of coronavirus cases in the state increased from 165 Sunday to 201. The Arkansas Democrat-Gazette reported that the deacon of a Cleburne County church said nearly three dozen people who attended a children’s event at the church tested positive.

For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia. The vast majority of people recover.

Hutchinson said he planned to call a special session of the Legislature to address the shortfall. Legislative leaders said they expected the session to begin as soon as late this week.

“The sooner we do this, the more evenly we can spread out the pain between now and the end of the fiscal year,” said Senate President Jim Hendren, who is also the governor’s nephew.

Hutchinson said the state has a $173 million reserve that can help avoid cuts to essential services such as the Department of Health, the Department of Emergency Management and the state’s child welfare program. But the governor said some surplus money must also be set aside for other needs that will come up during the outbreak, including equipment for hospitals.

The state also has other surplus money, including more than $152 million in a long term reserve fund.

Lawmakers had already been preparing for this year’s session, focused on the budget for the coming fiscal year, scheduled to begin on April 8.

Hutchinson said he doesn’t plan any layoffs because of the budget shortfall. He said it’s too early to say where cuts would come from, but noted there may be some savings from restrictions he placed on employee travel because of the outbreak.

Hendren and House Speaker Matthew Shepherd said both chambers were working on rules for how the Legislature can meet safely during the outbreak. Changes likely to be considered include ways for lawmakers to vote remotely and restrictions on the number of people allowed in the chamber. Arkansas’ Capitol is currently closed to the general public.

“There are some logistical issues we’re still trying to hammer out,” Shepherd said.

State health officials on Monday also ordered barber shops, hair salons, massage therapists tattoo shops and nail salons to close. The directive by state Health Secretary Dr. Nathaniel Smith takes effect at noon Wednesday.

The state last week prohibited dine-in service at bars and restaurants and closed public schools until April 17.

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