Beebe: Reducing Or Repealing Tax Cuts An Option For Teacher Insurance Fix

Gov. Mike Beebe said Wednesday (Sept. 11) that any short-term solution to a $53 million shortfall in the Public School Health Insurance program must be tied to a long-term solution that could include reducing or repealing recently passed tax cuts.

Beebe, interviewed by Roby Brock in the latest installment of “Talk Politics,” said any money placed in a short-term fix must be “a bridge to get to the long-term solutions.”

Also during the interview, Beebe commented on his plans when he leaves the governor’s office, political ethics, working with Wal-Mart to bring manufacturing jobs to Arkansas, and the presumptive gubernatorial battle between Democratic candidate Mike Ross and Republican Asa Hutchinson.

TEACHER INSURANCE ISSUE
The $53 million deficit is threatening near 50% increases in premiums to be paid by teachers and other plan participants, and lawmakers face growing pressure from teachers and other school employees to address the problem. The Joint Education and Insurance committees met Sept. 9 to debate options for closing the gap, including a call for a special session from one state senator.

The public school health insurance plan, which provides coverage for roughly 47,000 teachers and school personnel in Arkansas, has been troubled for months. Lawmakers were made aware of the problem as early as December 2012, according to minutes from an insurance subcommittee meeting. Toward the end of the session, the issue was debated with lawmakers and Beebe agreed to move $8 million in general improvement funds to handle several catastrophic claims that hit the system.

Beebe on Wednesday said the premium increases are “awfully high,” and teachers will get “hit with catastrophic increases” if the Legislature waits until the fiscal session in early 2014 to address the issue. However, Beebe stopped short of advocating for a special session, saying that it was his job to gather and present options to the Legislature so a consensus could be reached before a session is called.

“If you can agree on that (consensus solution), then you can get in and out in three days” and not waste taxpayer dollars on an extended special session, Beebe said.

What are some options? While declining to say which option he thought best, Beebe’s options include reducing or halting tax cuts approved in the recent session, pulling money from other funds, increasing state control of how school districts allocate money for insurance and reviewing the system for possible changes.

“How did we get here? The system has more claims paid out than money coming in. … It’s a business. It’s an actuarial function,” Beebe said.

A specific example Beebe mentioned as a source of money for a short-term solution is an about $200 million fund that supports the National School Lunch Act program. The NSLA money supports programs and direct services to benefit low-income students in public schools.

“That’s just one of the options. Now, a lot of superintendents don’t want to do that,” Beebe said.

Beebe did not address some legislators’ suggestions to look at surplus money from the recently-ended fiscal year.

ETHICS ISSUES
In the recent year, several elected officials have faced ethical and criminal procedures that either forced them out of office or forced them to drop out of political races.

Arkansas Treasurer Martha Shoffner (D) was forced to resign after it was revealed she accepted bribes. Sen. Paul Bookout, D-Jonesboro, resigned from office after it was discovered he used campaign funds for personal gain. Lt. Gov. Mark Darr (R) dropped out of the Fourth Congressional District race after Matt Campbell with the Blue Hog Report blog reported on discrepancies and expenses in Darr’s campaign finance reports related to campaign debt from his Lt. Governor’s race.

Beebe told Brock that “progress on that (ethics reform) should continue,” but laws will never prevent unethical behavior.

“I don’t know if you ever legislate ethics, ultimately,” Beebe said.

As to whether Darr should follow Bookout’s action and resign from office, Beebe noted that what is “good for the goose is good for the gander.”

“If it’s true, it’s wrong and there have to be consequences,” Beebe said of the allegations against Darr.

OTHER ISSUES
• 2014 Governor’s race, elections
Beebe has endorsed Ross and plans to actively campaign for Ross, but said he believed Hutchinson “would be more pragmatic than a lot of people think he would be.” He pointed to Hutchinson’s support of Arkansas’ private option plan that will regulate how the state spends money under the new federal healthcare system, also known as Obamacare.

However, Beebe said he is actively campaigning for Ross because he trusts that Ross will follow an education and economic development focus that has been the core of Beebe’s time in office.

Beebe also said he may campaign in some legislative races, but not during the primary election cycle.

• Working with Wal-Mart
Beebe said state officials are now working with three companies that may locate in Arkansas as a result of the effort by Bentonville-based Wal-Mart Stores Inc. to return manufacturing to the U.S.

Beebe was one of eight state governors to attend the “U.S. Manufacturing Summit” in Orlando, Fla., that was held Aug. 22-23. The event connected economic development officials from 36 states with about 600 Wal-Mart suppliers and retail vendors.

The summit was the first high-profile public event held by Wal-Mart following the Jan. 15, 2013, company pledge to purchase in the next 10 years an additional $50 billion in U.S.-made goods.

One reason Beebe is confident Arkansas will benefit from the effort is because “we’re seeing more and more patriotism” among American consumers when making choices between domestic- and foreign-produced goods.

• Retirement plans
Beebe, who will leave office in January 2015 after two four-year terms, quickly rejected the notion he could be selected by Hillary Clinton as a running mate in the 2016 presidential election.

“Number one she wouldn’t ask me, and number two Ginger (Beebe’s wife) wouldn’t let me,” Beebe said.

Beebe said his several decades of service as a state senator, Attorney General, and Governor has “been a good ride,” and he’s grateful for the opportunity to serve. He did say that with or without term limits, “eight years is enough for any governor.”

What will he do?

“I may teach a college course, may serve on a board or two,” Beebe said, and added with a laugh that his wife told him he couldn’t just stay at home.

He has several options, but said, “I’m going to wait a little while (after leaving office) and make that decision.”

You can watch the full interview below.