In a pre-session interview, Speaker-elect Rep. Davy Carter (R) and Sen. Michael Lamoureux (R) said they favored using existing surplus funds and projected revenue growth to shore up a projected $350 million Medicaid shortfall.

“Cuts aren’t the starting point,” Carter told reporters at an Associated Press Managing Editors forum at the state capitol.

“We’re not going to throw people out of a nursing home,” Lamoureux added.

Gov. Mike Beebe (D) has proposed using some surplus money to close the funding gap as well as about $139 million in cuts to services that would affect nursing homes, small businesses, and dental care for citizens.

The two leaders of the General Assembly stressed that the Medicaid shortfall and possible expansion of the program under the guise of the federal health care law would be the overriding issue of the session, which starts next week.

“That issue is going to drive almost every other monetary issue,” said Carter. “It’s the big elephant in the room.”

Neither leader is convinced that a Medicaid expansion – which the federal government has said is an “all or nothing” offer – will offer a solution to the state’s problems.

Lamoureux said he felt when the session started and legislators could spend more time debating pros and cons, he felt a compromise would emerge. He also said that the learning curve for members was evolving.

“When I meet with outside [health care] groups, I feel like I learn something new, I feel like I learn something I should have known 6 months ago,” said Lamoureux.

Carter said he had concerns about an expansion increasing the state’s population to being one-third supported by Medicaid.

“I’m not sold on it yet,” he said. “I’m focused solely on the math.”

The math may be difficult with the federal government’s interpretation that states must fully engage in Medicaid expansion, not grow the program incrementally.

“All or nothing takes away the ability to negotiate something,” Lamoureux said. He expounded on some conservative reforms he felt members would push for, such as scaling back on services, drug testing, and co-pays for Medicaid users.

Both leaders said that there would still be discussion and potential for tax cuts, even with the Medicaid debate.

Lamoureux said a sales tax break on energy for manufacturers and a tax break on parts taxed for plant expansions would be debated. Carter has led an effort to look at reforming the state income tax.

Beebe has proposed further reducing the grocery tax, which could cost about $70 million from the state coffers.

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