Sen. Files Explains Private Option-Tax Cut Ties

State Sen. Jake Files (R-Fort Smith) says that the “private option” debate in the House will dictate which road a tax cut package may move.

Files, who appeared on Talk Business Arkansas’ daily update, said that when a pivotal House vote occurs on the appropriation for the private option – which requires a supermajority of 75 votes – it will clear the picture for the number and size of tax reform.

“You kind of have to be running two sets of books running parallel,” Files said. “If it [private option] passes, I think it opens up one stream that people may not like as much but they’re agreeable to because the money is there. If it doesn’t pass, then I think it takes a whole different direction because I still think there’s money available for tax cuts.”

A Department of Human Services study indicated the state could save as much as $670 million over the next decade under the private option model.

Files said the package of tax cut bills that are likely to be triggered if the private option is adopted, includes income tax bracket reform, manufacturing and agricultural tax cuts, and a capital gains cut.

“If it doesn’t pass, I think you go back to the drawing board,” he said.

“And the difficult thing is it has to be done in a short period of time,” Files added, alluding to an April 19th adjournment deadline.

Files said he thinks there is consensus in the Senate for the private option, including a 75% vote threshold needed to advance the appropriation for the measure. But the House is a different subject, he said.

He said when people back home contact him to vote against the private option and he explains the benefits versus doing nothing, their tune change tunes.

“I think a lot of it is an educational game,” said Files.

There was a vote in the House of Representatives today that gave some indication of where members may be on the necessary 75 votes needed to pass an appropriation for health insurance expansion. An amendment to an appropriation bill for Medicaid and the private option funding received 62 votes in favor and 26 opposed. One of the opposed votes, Rep. Jeff Wardlaw (D-Warren), said he cast his ballot erroneously and was in favor of it.

One member voted present and 11 members registered “not voting.”

You can watch Files full interview below.