Jeannie Nuss, Associated Press
Arkansas Forestry Commission Director John Shannon, left, and finance official Tim Leathers, center, field questions from lawmakers on Wednesday, Jan. 4, 2011, during a meeting in Little Rock, Ark. Shannon faced scrutiny from legislators after Gov. Mike Beebe's office said he would ask lawmakers to give the financially troubled Forestry Commission $2.7 million to stretch it through the end of the fiscal year.

LITTLE ROCK, Ark. — The head of the Arkansas Forestry Commission faced scrutiny from several lawmakers Wednesday after Gov. Mike Beebe's office said he would ask legislators to give the financially troubled agency $2.7 million to stretch it through the end of the fiscal year.

Financial problems led the agency to lay off 36 workers this month, and during a legislative meeting, some lawmakers questioned whether the additional money would prevent the commission from ending up in the red again.

"If we give you an additional bailout ... what confidence do we have that there are going to be differences in your spending habits with your agency?" Sen. Missy Irvin, R-Mountain View, asked John Shannon, the Forestry Commission's director.

Shannon went over some of the agency's expenses and stressed that going forward, borrowing money will not be an option.

Beebe's office said Tuesday that he will ask lawmakers when the legislative session begins in February to use money from the state's surplus to keep the agency solvent and to repay federal grants that it had been improperly using to bolster its budget.

The request will include $1.2 million that the state owes the U.S. Forest Service for grants that Beebe's office said the commission improperly used to pay for its operations over the past four years. The additional money won't prevent the layoffs that take effect Jan. 13.

"What would happen to the agency if you didn't get that money to see you through to the end of the year?" asked Rep. Stephen Meeks, R-Greenbrier.

Tim Leathers, the deputy director for the state's finance department, said that without additional funds, there would be "very dramatic cuts" to the forestry commission, which employs about 300 people and oversees fire protection and conservation in the state's forest.

"We would be at great risk for having a lot of fire problems," Leathers said.

In announcing the pending layoffs, the agency initially said a drop in timber sales and severance tax revenue caused its $4 million shortfall.

But on Wednesday, lawmakers echoed criticism voiced by the governor's office, which said the commission's misuse of federal money exacerbated the problem.

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