Hutchinson proposes 3 percent annual spending increase

LITTLE ROCK—Arkansas' governor proposed a $5.6 billion budget on Tuesday that increases funding for the state's Medicaid program while setting aside surplus money for future tax cuts and highway needs, and the Republican asked the state's four-year colleges and universities to freeze tuition rates for in-state residents.

Gov. Asa Hutchinson proposed increasing state spending by about 3 percent for the fiscal year that begins July 1. Hutchinson said the proposed funding increase is $100 million less than what he originally proposed more than a year ago. The bulk of Hutchinson's proposed funding increase, nearly $138 million, would go toward Medicaid.

"This budget is conservative in spending, increases our savings and invests in the future," Hutchinson told members of the Joint Budget Committee. Lawmakers are set to return to the Capitol in February for a session focused primarily on the state's budget.

The Medicaid increase comes from the expected rise in the state's share of the cost for the hybrid Medicaid expansion under the federal health overhaul. The federal matching rate for traditional Medicaid has also decreased due to improvements in the state's economy.

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