House OKs ‘private option’ funds, tax cuts

A lot can happen overnight at the state legislature.

After a Monday afternoon failure to approve the funding bill for the “private option” plan, House members cleared the measure with a supermajority of  77 votes.  Twenty-three opposed.

On Monday, HB 1219 only received 69 votes when it needed 75 to clear the whole chamber.

What changed from the first vote?

Several undecided votes moved to the “yes” column and a couple of “no” votes moved to the “yes” column too. Reps. Ann Clemmer, R-Benton, Stephanie Malone, R-Fort Smith, and Mary Lou Slinkard, R-Bentonville, voted in favor of the measure after not voting or abstaining on Monday.

Reps. Les Carnine, R-Rogers, Jon Eubanks, R-Paris, John Hutchison, R-Harrisburg, Allen Kerr, R-Little Rock, Kelly Linck, R-Yellville, and Sue Scott, R-Rogers, were members moving from opposition to support. Scott spoke at the well of the House and said she had been overwhelmed with contacts from people in her district who would be positively impacted by the bill’s passage.

Rep. Stephen Meeks, R-Vilonia, supported the bill on Monday, but changed his vote on Tuesday to “no.”

Of note, HB 1418 by Barnett, which would shift some general revenues to dedicated highway funding was placed on the House Transportation committee calendar. It was previously defeated when Speaker Davy Carter (R-Cabot) had the bill assigned to the House Rules committee.  Barnett remain unchanged in his opposition to HB 1219.

“I commend my colleagues who have just cast a difficult vote in favor of the ‘private option’. With their support, Arkansas now leads the nation with a conservative alternative to the policy forced upon us by the federal government,” Carter said after the vote.

The “private option” funding bill, HB 1219, is the appropriation bill for the Arkansas Department of Human Services Division of Medical Services, where Medicaid is housed and administered.

It creates a Health Care Independence Program Trust Fund that will accrue money sent from the U.S. Department of Health and Human Services to the state for the purposes of Medicaid expansion.

Along with the agreement between the state and feds on the flexible use of the Medicaid money, the trust fund will also collect:
• Increases in premium taxes;
• Reductions in uncompensated care; and,
• Other spending reductions resulting from the “private option” plan.

“The fund may be used by the Department of Human Services to pay for future obligations under the Health Care Independence Program created by the Health Care Independence act of 2013,” the amendment reads.

No line-item dollar figure is expressed in the amendment regarding the federal money. The DHS Division of Medical Services appropriation bill also includes funding for all salaries in the Medicaid division as well as billions of dollars in funding for nursing homes, prescription drugs, hospitals, infant care and ArKids First.

With its passage, the bill now heads to the Senate for consideration. It must receive 27 votes in the Senate chamber.

Also with the bill’s passage, a majority of House and Senate members appear poised to quickly move on the state’s overall budget – the Revenue Stabilization Act – and a package of tax cuts.

TAX CUTS, STEEL MILL DEAL
Just an hour after approving the controversial funding bill for the “private option” health care reform measure, four tax cut bills and funding for the Big River Steel mill superproject cleared the House chamber.

The four tax cut bills included income tax reform, capital gains taxes, and a sales tax on utilities for manufacturers.

HB 1585, by Rep. Charlie Collins, R-Fayetteville,, would would make changes to the personal income tax rates by elevating the top tax rate from $34,000 to $44,000 and then lowering the top tax bracket from 7% to 6.875%. HB 1585 also makes technical corrections to the lower income tax tables. It passed the House of Representatives by a 74-10 margin.

HB 1966, which raises the tax exemption level on new and existing investments, was sponsored by House Speaker Davy Carter, R-Cabot. The bill cleared the full House easily by an 87-3 margin.

HB 1218 by Rep. Lane Jean, R-Magnolia, slices the sales tax on utilities for defined manufacturers. It cleared the House with 96 votes and none opposed.

HB 1234, Gov. Mike Beebe’s proposal to further eliminate the grocery tax, passed on a 90-2 vote. It is supported by lead sponsors Rep. Darrin Williams, D-Little Rock, and Sen. Jason Rapert, R-Conway.

All four tax cut measures now head to the Senate for consideration.

House members also approved the funding bill for the Arkansas Economic Development Commission, which included a $20 million revenue dedication for the Big River Steel, by an 81-9 margin. That measure goes to the Governor for signature.