Arkansas, apparently, is one state that has managed to weather the recession fairly well.  Stateline has an article today about the state's budget process, which is quite interesting:

Every two years lawmakers pass a list of appropriations, and agencies project what they will need to run their programs. Then those funding requests are divided into three categories: A, B and C.

–Category A is essential programs, including education, corrections, public assistance, transportation and Medicaid.

–Category B is cost-of-living increases for all agencies, necessary expansions of programs like Medicaid, and new programs that fill a critical need. The state’s $10 million community corrections project, for example, went into this category.

–Category C is a wish list of new programs lawmakers and agency heads would like to start. According to retired state Senator Wayne Dowd, a Democrat, “category C is basically File 13 — the trash bin.”

I'm not sure how easy (or fraught) the decisions about which funding requests go to which categories are, but prioritizing at the beginning of the budget process has to make the actual funding decisions (and potential reductions) more straightforward and less acrimonious.

Once the categories are created — in closed meetings among about a dozen senior lawmakers and the executive branch fiscal team — they are matched up with the state’s conservative revenue projections. Funding goes first to A, second to B, and if anything is left over, some C projects may get funded. . . .

As the budget year proceeds, the finance department assesses revenue projections on a monthly basis. Beebe checks deposits every day. If revenues fall short of initial projections, the chief fiscal officer can make across-the-board cuts — first from C, then from B, and, only when the fiscal situation is dire, from A.

As Dowd told Stateline, “If you don’t have the money, you don’t have the money.”  Words to live by.