Clint Reed: Legislative Uncertainty Is Certain

Editor’s note: This guest commentary appears courtesy of The City Wire. Clint Reed, author of this opinion-editorial, is a partner at Little Rock-based Impact Management Group.

Uncertainty reigns supreme as the 2013 Arkansas legislative session approaches. There are many big issues to address in a timely manner, and most will not be settled until the last days of the legislative session.

VOTER ID DISCUSSION
Voter identification laws have been a hot topic in a number of states in recent years and are sure to be a prominent issue in Arkansas in 2013. Supporters will argue that many states have passed common sense legislation stating a registered voter must show a valid photo identification card in order to cast a ballot.

Opponents of this legislation will argue passionately this is an attempt to impede participation in voting, particularly by minorities and the elderly, and that such measures may be unconstitutional. Voter ID legislation passed the Arkansas House of Representatives in 2011, but was later stymied in the Senate. Now, Republicans hold a majority in the Senate and on the State Agencies committee where the bill is likely to be heard.  This issue will be a high profile, emotional, and partisan issue.

GUN CONTROL
While the debate begins in Washington regarding new potential gun control measures, many similar proposals could make their way into the Arkansas legislature. The recent tragedy at Sandy Hook Elementary School in Newtown, Conn., has re-ignited debate over gun issues as well as mental health care and treatment.

For the most part, Arkansas is a rural, conservative state and there will not be a widespread appetite for any gun limitation measures by the Arkansas legislature. There is potential, however, that mental health evaluation and treatment issues could be looked at legislatively.

TORT REFORM
Many in the business community believe, and rightly so, that the 2003 comprehensive tort reform legislation has been made toothless by administrative rule-making within the judiciary – specifically by the Arkansas Supreme Court.

There will be a legislative effort to begin the process of reforming the state’s tort laws so that the legislature can clarify their intent without the judicial body interpreting statutes. This will, again, pit the business community against the trial bar, and it will cross party lines.

SCHOOL FUNDING
School funding issues will again be on the agenda, given the Arkansas Supreme Court’s recent ruling to allow school districts that have collected more in property tax revenues than the state-mandated amount to keep the additional revenue.

The court ruled that the Department of Education does not have the authority to redistribute excess revenue collected to other school districts, and instead said that revenue should be returned to the districts from which it collected. This ruling raises a number of questions about the state’s equality and adequacy requirements that stemmed from the 2007 Lakeview case.

While the state is pursuing legal options to have the court rehear the case, look for the Arkansas legislature to pursue legislative options as well.

LOTTERY SCHOLARSHIP CHANGES
Another educational issue that will be discussed and addressed is the potential for cuts in lottery scholarships. The lottery oversight committee recently recommended reductions in the amount of scholarships given for both four year and two year college enrollees, due to lower than anticipated lottery revenues.

In order for these recommendations to take effect they’ll have to be approved by the 2013 General Assembly. Look for competing alternatives to reducing scholarship amounts to emerge as newly elected legislators enter into the discussion, including raising grade point average or ACT score requirements and discussion of minimum hours for enrollment for eligibility.

THE BUDGET AND MEDICAID
As with most legislative sessions, budgetary matters will be a steady undercurrent in many legislative battles and will end up dominating the discussion. The Arkansas Constitution requires that the state have a balanced budget, so all discussion will center on requiring expenditures to equal revenues.

The budget will become even more hotly debated due to the projected shortfall in the state’s Medicaid program. Medicaid and its reform and/or expansion under the federal Affordable Care Act will dominate the 2013 session.

Republicans by and large will question how Arkansas can expand a program by 250,000 recipients when it is running a several hundred million dollar deficit. Democrats will argue that the state has an obligation to expand the safety net to those up to 138% of the poverty level, and that federal funding will help ease the state’s financial burden in doing so.

Republicans are expected to push for a hybrid measure of expansion that includes significant reforms dealing with eligibility requirements, fraud, and abuse that will undoubtedly require cooperation in the form of a waiver from the federal government. So far, the federal government has basically said, “it’s an all or nothing approach.”

While some on both sides are hopeful that a deal can be reached, there is also a significant contingent of legislators that have taken a firm position against any expansion. If any deal is remotely possible, it will be reached in the waning days of the General Assembly.

TAX CUTS
This Medicaid debate will also raise the stakes on several other high profile issues and put many of them in limbo.

Without finality on Medicaid reform and/or expansion, all other issues with a fiscal impact are likely to be tabled. Republicans will champion moderate and bold tax reforms (i.e., income tax cuts), while Gov. Mike Beebe will continue his gradual elimination of the sales tax on groceries.

Without knowing the financial obligations of Medicaid reform and/or expansion, tax reform will be one of the last issues to be finalized. Without finality on all fiscal matters, it could take some time to reach the required balanced budget.

The 2013 session will begin slow, but will undoubtedly end with most of the significant issues of the important issues being settled in the final days of the General Assembly.

Buckle up!