Tuesday, April 12, 2016

TOP STORY >> Cuts imperil programs all across state

Leader senior staff writer

With the fiscal session of the General Assembly convening today, several legislators have vowed to vote against funding Arkansas Works—that’s the governor’s version of the private option.

Failure to approve Arkansas Works will leave a gaping $150 million hole in the governor’s budget for 2017 and, according to state Rep. Joe Farrer (R-Austin), a $350 million hole for 2018 — leaving no money for highways and other essential programs.

“It’s all in the math,” Farrer said Tuesday.

Farrer, who previously opposed the private option, said he’s now for it.

He said he voted against the private option three years ago, when the costs and benefits were hypothetical.

“Now it’s a business decision. I’m supporting it to help get the money,” Farrer said.

He said that 70 percent of all births in the state are Medicaid births, and they need to be paid for. Without Arkansas Works, John Stephens, a health insurance consultant hired to assess the programs, says costs for traditional Medicaid would go up 6 to 8 percent.

“We paid him $2 million to give us the numbers, and he’s the only expert I know up here,” Farrer said.

Last session, both houses approved the Arkansas plan as policy by a simple majority, but funding matters require a supermajority—75 percent—of each house. In the House, that’s 75 votes, in the Senate, with 35 members, that’s 27 votes.

That means the Senate will likely need to turn at least two nays into yeas.

“I’m voting for the funding,” said Sen. Jane English (R-North Little Rock). Of her original opposition to Private Option/Arkansas Works, “I lost the battle in 2013, as a policy decision,” she said.

When it came time to fund the measure the first year, English provided the needed 27th vote in the Senate in exchange for comprehensive reorganization of workforce education.

“We have moved some people off traditional Medicaid, where the state paid 30 percent of the cost and onto Medicaid expansion,” she said, “where the state’s share this year is 0 percent, and next year 5 percent.

“We have a program going on two years, made a lot of changes, moved some people off traditional Medicaid where we paid 30 percent of costs,” she continued. “In Arkansas Works, the state’s share is 0 percent for now but goes up to 5 percent the next year.”

Sen. Eddie Joe Williams (R-Cabot) said he would vote for the program. “You have to look at the entire process. There’s parts I don’t care for and parts I do. But the governor’s $100 million tax cut means the budget would be in trouble without the Medicaid cost offsets provided the state,” Williams said.

Federal law requires public hospitals to provide care for the indigent, which would be uncompensated care without Arkansas Works. “That’s an unfunded mandate,” he said. “Those are real costs and somebody has to pay for it.”

Rep. Camille Bennett (D-Lonoke) says there’s nothing the General Assembly can do to change the Affordable Care Act, and Arkansas residents are going to have to pay taxes regardless, so they might as well get some of that value back to pay for Arkansas Works.

“I voted for it after changes were made to make it more effective, and I’ll be voting to fund it. I see no other option available,” Bennett said.

She said the Senate will take the matter up first and that the House may decline to approve any funding bills until the matter is settled, so legislators will know whether or not they have to cut the budget.

She said she believes the House will approve funding Arkansas Works.

While Williams and English opposed the private option when it first came before the General Assembly in 2013, Sen. Jonathan Dismang (R-Searcy), now Senate president pro-tempore, helped former House Speaker Davy Carter (R-Cabot) navigate the tricky waters of approval.

Dismang is expected to once again play a major roll in getting Medicaid expansion funded.


Rep. Donnie Copeland (R-North Little Rock) remains steadfast in his opposition to the Medicaid expansion under any name.

Copeland intends to introduce a bill that would split Arkansas Works out of the DHS budget so it would be possible to vote against Medicaid expansion without voting against the DHS budget.

He says he’s not concerned about the $150 million budget shortfall to the governor’s budget. He says it can be made up by eliminating waste. He cited a $200 million state information technology program he says has never worked right and the $20 million contract he says the state gave the same company to straighten out its own mess.

He would also eliminate corporate welfare to outfits like Big River Steel and make sure the Medicaid money is spent on disabled and needy children and traditional Medicaid patients.


If Arkansas Works isn’t approved, University of Arkansas for Medical Sciences Chancellor Dan Rahn says it could leave hospitals statewide providing $200 million in uncompensated care, and UAMS’ loss alone could be $65 million, he said Tuesday afternoon.

“We’d have to limit uncompensated care to emergency only,” he said.

“Seventy-five percent of our entire (UAMS) budget is supported by patient care,” he said. “It subsidizes the teaching.

“It will take $30 million out of academics,” he said, and result in big cuts in personnel.

Rahn said it was frustrating to have “the same political struggle every year.”

He said he supports the governor’s enhancements to the private option.

It was Carter, as speaker, who guided private option funding through the House, and his successor as speaker, Rep. Jeremy Gillam (R-Judsonia), is working to help the governor get his version funded.


Gillam on Monday sent lawmakers a copy of what a $150 million shortfall would mean to the various departments, agencies and programs throughout the state, starting with a $31 million hit to public education, libraries and workforce education.

Nearly $5 million would be cut from higher education; $3.4 from two-year technical colleges; State Police would be cut about $2 million; the state Health Department by nearly $4 million; county jail reimbursement about $500,000 and child-support enforcement could lose $400,000.

The Department of Human Services would be cut by $54 million, including about $11 million from Children and Family Services, $1.4 million from Division of Youth Services and about $2 million from Developmentally Disabled services.

The $31 million in public school fund cuts include $7 million from the school recognition program, $1.6 million for at-risk programs, $5 million in Better Chance funds, $2 million in coordinated school health, $9 million from National Board of Professional Teaching Standards, $3 million in Smart Start funds, $750,000 in surplus commodities.