It was something of a novelty, a governor welcoming lawmakers to a legislative session by promising what he would do in the next session. Assuming, of course, his reelection. And assuming renewal of Arkansas Works.
In any General Assembly it’s smart to bet on the governor because, with comparatively rare exceptions, governors get what they want. Today’s question is whether the incumbent governor will get what he wants in this particular meeting or will have to wait a few weeks and try again in a special session, with what he assumes will be a somewhat friendlier Arkansas Senate.
We are talking about the Medicaid budget, for which Gov. Hutchinson seeks about $110 million in state funds. That money, per usual, would be matched by hundreds of additional millions in federal dollars through the Affordable Care Act. (You perhaps have heard of it as “Obamacare”). But more: without the ACA’s contribution Mr. Hutchinson’s entire general revenue budget implodes, as it would have in previous years had the General Assembly not continued it.
Some quick history: five years ago then-Gov. Mike Beebe pronounced himself opposed to the ACA but accepted its Medicaid expansion money. With Washington’s blessing he and a clique of Republican legislators crafted the “Private Option.” Funds that would have gone directly to medical services were instead used to purchase health insurance for a subset of the population — basically, the working poor.
As with everything else remotely associated with President Obama, the Arkansas legislature recoiled. The Private Option eventually passed but with not a vote to spare in either chamber. When Beebe’s tenure ended his successor declared the Private Option’s time over, then immediately sought its continuation under a new name: “Arkansas Works.”
In sessions since Democrats have almost unanimously supported the program, while Republicans have been sharply divided. Opposition in the House Republican conference has since softened somewhat and its leaders have assured Mr. Hutchinson that, after a few perfunctory speeches in protest, the votes for Medicaid will be there.
This year’s Senate could prove a different story, owing to its extraordinary, and possibly unprecedented, three empty seats. Two resignations (one member joined the Trump administration, another departed following a criminal conviction) and a death have reduced Republican membership to 23 of the Senate’s 35 seats. A clear majority, yes, until comes time for appropriations. Spending money requires a three-fourths vote, to mean 27 of the Senate’s constitutionally-mandated body, [begin ital] not [end ital] three-fourths of any current membership. Two of the three former members were in Mr. Hutchinson’s corner last year, when the “Arkansas Works” budget was approved again — by a single vote. Those seats won’t be filled (in special elections) until after the current session ends.
In his hunt for Republican votes to maintain Arkansas Works in the current meeting Mr. Hutchinson has for months been baiting the field. He has emphasized time and again his administration’s reduction in the number of Medicaid beneficiaries (50,000 or so) and his eagerness to shed still more. His request to implement a work requirement for “able bodied” recipients is pending in Washington. He has sought to burnish his conservative bone fides in other ways, from bashing Planned Parenthood to effectively endorsing the open-carry of sidearms. (That Mr. Hutchinson has a primary opponent on the starboard fringe is yet another incentive to tack, and talk, right.) If it is conservative cover that Senate Republicans want, the governor will do his best to provide it. And that would include a salt lick to go along with the corn: another income tax reduction, this one to be presented to the General Assembly next January.
Serious reduction in general revenues began under Beebe, who honored his pledge to eliminate as quickly as feasible the state sales levy on groceries, in the process eliminating almost $1 billion to date. Mr. Hutchinson’s income tax cuts, to date benefitting mostly middle- and lower-income Arkansans, have taken another $150 million. The tab for his proposed 2019 cut, targeted at those earning $75,000 or more: $180 million.
The budget, Medicaid expansion, tax policy: so interconnected they cannot be disconnected without profoundly altering state government’s fiscal and programmatic dynamic. Reductions to the state treasury from tax cuts have been offset by a reviving economy, including low unemployment, and by flatlined budgets from consecutive governors and legislatures. But the bulk of the latest tax cuts would have been impossible absent the hundreds of millions of dollars that have flowed from the nation’s capitol to Arkansas’s capitol from the ACA.