Private Option bill clears House hurdles, tax cut plan to become law

A pair of bills involving the funding and operation of the state’s Private Option healthcare program for the poor and uninsured were approved by the House Thursday afternoon.
The state House voted 80-16, with three voting present, to approve Senate Bill 96 and 82-16 to approve Senate Bill 101.

Also, the Arkansas Senate approved with a 31-0 vote a tax cut plan proposed by Gov. Asa Hutchinson. The Governor is expected to sign the bill into law Friday morning (Feb. 6).

PRIVATE OPTION VOTES
Senate Bill 96, sponsored by Sen. Jim Hendren, R-Sulphur Springs, would end the Private Option on Dec. 31, 2016 and would create a task force to look at the healthcare issue in the state.

Senate Bill 101, sponsored by the Joint Budget Committee, was an appropriations bill that would fund the Department of Human Services, Division of Medical Services budget through June 30, 2016. That bill, which has already passed in the Senate and now heads to the Governor’s desk, would include monies for the operation of the Private Option.

Rep. Kelley Linck, R-Flippin, who chairs the House Public Health, Welfare and Labor committee, said the debate over the Private Option has been one of the most debated issues in the state since a secession vote during the Civil War. Linck said the bill would help with reforming the Medicaid system in Arkansas.

Rep. Josh Miller, R-Heber Springs, who sponsored a bill Wednesday that would end the program as of June 30, 2016, said he believed representatives should live up to their campaign promises.

“You did not make campaign promises to make our colleagues and elected officials happy,” Miller, who voted no, said of the issue.

Rep. Laurie Rushing, R-Hot Springs, said while she was opposed to the Private Option, the bill (SB 101) before the House was “the only path there.”

“There is no perfect bill,” Rushing said to colleagues. “If you are waiting for a perfect bill, you will be waiting 20 years or forever because it will never happen.”

On SB 101, Rep. John Payton, R-Wilburn, asked legislators to hold off on approving the bill because legislators have other budget bills to consider. However, House Speaker Jeremy Gillam, R-Judsonia, said the vote on Senate Bill 101 as well as Senate Bill 96 gives legislators an opportunity to have faith in officials as well as the process.

“There is a fine line between representing our districts and leading,” Gillam said, noting he believes lawmakers should “lead responsibly but lead bold.”

“The vote in the House today on the Health Reform Task Force bill and accompanying appropriation was a bipartisan effort and represents the right step forward as we seek ways to best reform Medicaid in Arkansas,” Hutchinson said in a statement. “I am grateful for the confidence that the legislature has placed in the task force and the opportunity it represents to guide the future of health care reform in Arkansas.”

TAX CUT VOTE
The Arkansas State Senate passed the tax cut bill, SB 6, on Thursday by a 31-0 vote. Hutchinson campaigned on a tax cut plan that would provide tax relief for those making between $20,000 and $75,000 annually.

After adjustments for state statutes and the addition of an alteration of the capital gains tax rate, the final bill passed by lawmakers would:
• Decrease the existing capital gains tax rate exemption from 50% to 40%;
• Lower income tax rates from 6% to 5% for Arkansans making $21,000 to $35,099; and
• Lower income tax rates from 7% to 6% for those with incomes between $35,100 and $75,000.

Annual tax savings for those in the income tax range would save as little as $16 per year up to $540 annually.

The bill has a projected $22.9 million impact to the state in FY 2016 and a $90.3 million impact on the state budget in FY 2017, according to analysis from the Department of Finance and Administration.

The governor plans to hold a bill signing ceremony on Friday morning at 11 a.m. in the Governor’s conference room.

“I want to thank the legislators for their diligent work in passing this tax cut for working Arkansans. I am especially grateful to the leadership of both houses for their efforts on this bill. They truly did the work of the people — and the people of Arkansas will benefit,” Hutchinson said in a statement. “This is an encouraging first step in making Arkansas’s income tax rates more competitive with surrounding states, which will only enhance our reputation as a state that is eager to attract and accommodate new jobs and businesses. Arkansas has been an island of high taxation for too long, and I’m pleased that we are doing something about that.”