Arkansas will likely take in $4.72 billion in fiscal year 2013, up $161 million from 2012, according to the state's budget projections.
And as it stands, the state has a surplus to the tune of $197 million.
Paying for Medicaid, however, is "the 800 pound gorilla in the room," said Brandon Sharp, the state's budget director.
Staring Tuesday, state lawmakers will get a look at the budget projections and requests from state agencies.
Still in question and hotly contested---expanding Medicaid by accepting money from the federal government, a key plank in the controversial healthcare reform measure President Obama and Washington Democrats rammed through Congress.
Republicans and Democrats are sharply divided over expanding Medicaid and President Obama's healthcare fix is unpopular in the Natural State.
Gov. Mike Beebe has said he wants to expand Medicaid coverage but it is far from being a done deal.
Beebe is slated to deliver his budget to state lawmakers on Nov. 15.