Red, Red & Blue: 2015 Legislative Preview

by Talk Business & Politics staff ([email protected]) 269 views 

Editor’s note: This analysis of the major issues of the 90th General Assembly is part of our Legislative Preview, which can be found in the latest magazine edition of Talk Business & Politics at this link.

When the 90th General Assembly convenes next week, the ghosts of Arkansas’ political past won’t recognize the party make-up of the state capitol.

Republicans will control 23 of 35 seats in the State Senate; 64 of the 100 seats in the Arkansas House; and all seven of the state’s constitutional offices, including the most powerful position in state government, Arkansas Governor.

Asa Hutchinson will be sworn in on January 13th as the state’s 46th governor – a position that will allow the former Congressman to eventually control thousands of appointments, the reins of nearly all state agencies, and a platform to promote a legislative agenda to shape the next four years of public policy.

With near supermajorities for GOP control in both chambers of the Arkansas Legislature, Gov. Hutchinson should have an easy time passing a conservative agenda, and he will for the most part. Already, legislative leaders are deferring their leadership agenda to the new governor similar to how Democratic majorities allowed their Democratic governors to set the tempo for statewide public goals.

Thankfully for Hutchinson, he has a good rapport with Senate President Jonathan Dismang, R-Searcy, and Speaker of the House Jeremy Gillam, R-Judsonia.

So what issues are likely to garner the most attention this session? This week’s Talk Business & Politics roundtable – including KATV’s Janelle Lilley and new TB&P contributors John Burris and Jessica DeLoach Sabin – debated several of the big ones. Watch the video below for the full discussion, plus read on for our in-depth look at many issues that are certain to make top headlines.

Hutchinson campaigned to be the “jobs governor” and the respective leaders of the Legislature say the economy is a top priority for the session. This wide-open topic nets a variety of subject matter: the state budget, tax cuts, the private option, and education reform to name a few.

More specifically, expect big pieces of this public policy to focus on Hutchinson’s goal for $100 million in tax cuts for the middle class. It was the biggest promise he made in his campaign and he’ll have to deliver to maintain credibility. So far, lawmakers appear solidly behind him, even if it means not passing other smaller tax cuts that are of importance to local interests.

Workforce education will be another crucial element in efforts to push the economy forward. State leaders have been reviewing these programs for potential changes – many of which may be made at the executive level – in order to match job applicants with the skills needed for available jobs. Optimizing these programs for the best results is the state equivalent of the Da Vinci code – unlock the puzzle and unemployment could set a record low.

Other crucial debates that will center on economic development likely entail the salary for the next director of the Arkansas Economic Development Commission, the agency charged with recruiting and expanding jobs. Currently, the salary level is $140,000, but times have changed and other states are in an arms race to recruit the best – much like college football coaches. Hutchinson has suggested raising the salary to $200,000, supplemented by private foundation funding, but the pay may need more tacked on to compete.

With a change in gubernatorial leadership, there will likely be a thorough review of the state’s economic development incentives. With another superproject waiting in the wings and other projects in the pipeline, Arkansas will have to do its best to keep up with the Jones’, those other states who are willing to go pretty far with enticements to recruit the next jobs producer to its borders.

It will be different, but no one can really paint the full picture of what Private Option 2.0 will look like. For starters, the political wrangling may determine various aspects of the PO’s final reveal.

Shrouded in controversy since its inception in 2013, the Private Option takes federal Medicaid expansion dollars and allows the state to use it for private health insurance for lower income workers. It is much more complicated than that distilled concept, but lawmakers will need a three-fourths vote from both chambers of the legislature to fund its continuation.

Other states have emulated Arkansas’ novel approach and have tailored it with additional conservative elements, such as tying insurance availability to searching for work. Gov.-elect Hutchinson said he will deliver a major speech on the subject by the end of January.

Look for a robust debate and a plethora of proposed changes from lawmakers eager to find a way to keep the program’s money in place while implementing conservative health care reforms. The PO is crucial to the state’s balanced budget projections and with many Republican newcomers having campaigned to shut down the program, the politics on this subject will be fascinating and a huge challenge for Hutchinson and legislative leaders.

Estimates suggest that a new $80-$100 million state prison needs to be built to house overflowing lock-up facilities and overcrowded county jails. But this isn’t your father’s Legislature. With a more conservative bent, spending money to lock up criminals isn’t going to be the first choice for lawmakers to consider.

Already a study has come back that offers a blueprint for what legislators and Gov. Hutchinson may propose. In late November, the Bureau of Legislative Research returned a report that suggests a review of Act 570, which altered sentencing guidelines. There is interest in privatizing corrections management in an effort to save money as well as utilizing intervention and re-entry programs. And, lawmakers are exploring an expansion of the highly successful drug court program.

“At the end of the day, the bad people need to go jail,” said Sen. Eddie Joe Williams, R-Cabot, a Senate leader on the issue. “If we try these alternatives and we still need a 1,000 bed facility, then we’ll take that up. But until we look at alternatives to our current process, if we build a 1,000 bed facility, guess what we’re going to do? We’re going to fill it up. And then we’re going to want another 1,000 beds and another 1,000 beds.”

In a pre-session discussion with reporters, Hutchinson explained that improving outcomes in this arena would be a crusade for him. Several of his first announcements of agency directors centered on corrections and the state police. With his background in law enforcement and prosecution, expect significant action on this front.

Education issues abound in the 90th General Assembly. In addition to the aforementioned workforce education reorganization that could take place, K-12 and higher education account for nearly 70% of state tax dollars spent.

Controversy is brewing among supporters and detractors of Common Core, a set of common standards in math and in English language arts that were at one time adapted by 45 states. Business leaders approve of the goals, while a growing number of disbelievers view it as taking away from local control. Lawmakers will have their hands full with both sides of the Common Core argument. Look for emotional and heated committee meetings on the subject.

ARE-ON is another education related subject that will enlist controversy. ARE-ON is the Arkansas Research Education Optical Network, a private network used by universities and hospitals but prohibited by Act 1050 of 2011 from being used by public schools. A group of broadband expansion supporters want the law changed to allow K-12 access to ARE-ON, while another coalition of broadband expansion supporters that includes the state’s Internet companies claims the shortfalls are exaggerated and that private industry solutions exist more cost-effectively.

Hutchinson should get a signature piece of education legislation through the General Assembly. He campaigned to expand computer coding in the state’s public schools – you may remember his granddaughter Ella Beth’s commercial – and lawmakers are likely to pass a bill with little controversy. The price tag is expected to be low, the goal is worthy, and the logistics for implementation should be achievable.

The other high-profile education issue that should stir further controversy involves the insurance program for the state’s public school employees. Already, lawmakers have met twice in a special session to make changes to the program that was in serious financial jeopardy. Additional alterations are being contemplated, including subsidizing new teacher insurance plans, but the system is in better shape due to fewer catastrophic claims. Lawmakers will still want to go further, but with Democrats controlling 10 of the 20 seats on the House Education Committee and the House Insurance and Commerce Committee, they will have some muscle to make sure that any changes have bipartisan support.

State Sen. Jimmy Hickey, R-Texarkana, has been leading the charge to change the state’s scholarship lottery. He and other lawmakers have been frustrated by declining lottery revenues, and therefore, scholarships. The independent nature of the Arkansas Scholarship Lottery and its governance board has also compounded the situation despite legislative oversight.

Recent legislative reports on the lottery have criticized its lack of business planning, its marketing decisions, and its underperformance compared to other states. Lottery officials say they are making changes and pushing reforms, but it doesn’t seem to be quick enough to meet legislative demands.

Hickey wants to pull the lottery business into the state Department of Higher Education. Hutchinson has suggested it might be a better fit under the Department of Finance and Administration. It appears something is going to change.

The newly passed Issue No. 3, an ethics and term limits measure, has caused tremendous consternation for the existing capitol culture. Many legislators and lobbyists are confused as to how extensive the new rules apply, what is prohibited during a legislative session, and no one wants to get fined or reprimanded.

But the amendment passed by voters doesn’t spell out all the answers to questions raised. Legislators will have to pass enabling legislation, defer rulemaking to the Arkansas Ethics Commission, and possibly wait for that months-long rulemaking process (that now has to be approved by the Legislature) to unfold.

The bottom line: the rules of engagement will be unclear at the state capitol during the 2015 regular session. Add to the mix the fact that the Ethics Commission was already seeking more funding as its investigatory duties have grown in recent years and you have a recipe for a variety of ethics debates.

The Turner Grain debacle this summer sent shockwaves through the state’s agricultural community. The controversy centered on Turner Grain Merchandising, a commodities dealer located in Brinkley. Turner did not pay or delayed payments on crops to farmers that it was supposed to process, leaving many farmers to find alternative brokerage sources or walk away from their yields.

Arkansas has no laws pertaining to grain dealers. It does have laws pertaining to warehouses, but warehouse owners can choose to be certified by state or federal authorities.

Look for an effort to be made to put inspectors in the field to try to identify “Turner Grain” problems before they reach the widespread proportions they did in 2014.

A number of Deep South states are looking to move up their presidential primaries to March 1, 2016 in an effort to create a “Southern Super Tuesday,” which would come on the heels of early primaries and caucuses in Iowa, New Hampshire, and South Carolina.

The state tried this in 2008, but it was an effort to force more attention on Arkansas as a primary state. It didn’t work well and the law was reversed in the next session.

In 2016 there could be benefit for a GOP candidate, particularly one with ties to the South (Mike Huckabee), for an early Southern primary. With Republicans in control of the state Legislature, it should be an easy deal. However, some Republicans will argue that it is a sorry use of taxpayer money and if Democrats want to throw a monkey wrench in the plan, they hold half the seats in the Senate State Agencies Committee, which would likely be the committee that would debate the issue.

There will be talk of highway funding in the 90th General Assembly, but there is no early consensus on what might occur. Traditionally, state highway money largely comes from sales taxes collected on motor fuels, but that’s been a declining revenue source thanks to better fuel efficiencies.

Some highway supporters have advocated taking growth revenue from general revenues tied to auto-related products and services and earmarking that money for road funding. But no one has taken a leadership role on this issue with enough sway to lead it through the legislature.

Legislative leaders say they don’t see an appetite to raise taxes for roads or add more money to a recently-passed half-cent sales tax, and Hutchinson said he does not plan to propose a highway program in the regular session.

This is a big business issue for the next regular session. The Arkansas State Chamber of Commerce, one of the most powerful business lobbying groups in the state, has hired a full-time employee to work on tort reform at the grassroots level. There is plenty of legislative sentiment for curtailing judicial activism and the penalties that get levied on businesses through the courts.

Gov. Hutchinson said he wanted to lead on tort reform during the campaign, so there is a good chance the subject gets hotly debated. However, Democrats have largely opposed tort reform efforts – arguing that it is overreaching and takes away from due process. To reinforce their positioning on this, they could prevent a constitutional amendment from clearing the Senate State Agencies Committee where they hold four of the eight seats. They also stacked an alternative committee, the Senate Judiciary, with four of eight members.

A number of non-economic issues will likely dominate the early days of the session. They include social issues impacting abortion, gun control, voter ID, and same-sex marriage. All of these issues were raised in lawsuits or the threat of lawsuits in the interim between the 2013 session and the coming one. They are hot-button issues with Republican voters – and some Democrats – so expect them to come fast and furious in 2015.

RELATED: Read about our “Top 10 Legislators To Watch” at this link.