Governor: 75% threshold too high, managed care can ‘simmer’, Kurrus decision won’t be reversed

Editor’s note: A video interview with Gov. Hutchinson appears at the bottom of this post.

Gov. Asa Hutchinson says the 75% threshold to pass appropriations bills is too high, traditional Medicaid reform will likely wait until 2017, a highway special session could include other non-controversial topics, and the decision to replace Baker Kurrus as Little Rock School District superintendent will not be reversed.

In a wide-ranging interview on Talk Business & Politics, which airs Sundays at 9:30 a.m. on KATV Ch. 7 in central Arkansas and 10 a.m. on KAIT-NBC in Jonesboro, Hutchinson discussed these topics and more in a lengthy interview with host Roby Brock.

The governor said passing the funding for his Arkansas Works Medicaid expansion bill was a bipartisan effort, but one that was defining for his tenure.

“We put a lot of political capital on the line. I campaigned for this very publicly, I was across the state. I defended legislators who supported that, so I did have a lot on the line, but Arkansas had a lot on the line,” he said. “Even though I get the credit or the blame sometimes, it was really an incredible bipartisan effort – both sides contributed to the outcome and it was successful.”

When asked if he thinks the 75% threshold to secure funding for appropriations was too high and should be changed, Hutchinson said yes.

“I do. It’s just extraordinary, as you can see from this, that a very small minority of legislators can block funding bills. You set the policy with a simple majority and the funding – it can be a higher bar – but three-fourths is too high as you can see from this,” Hutchinson said. “I also think there is a legitimate question as to what the constitution actually requires. I didn’t want to test it on this,” he added in reference to a capitol debate over whether or not the state constitution requires the 75% threshold in all instances.

Hutchinson said he will continue his focus on overall Medicaid funding and finding savings within the current system. That includes eliminating waste and fraud as well as potentially outsourcing some aspects of Medicaid services through a managed care approach. Other legislators have suggested alternatives to the governor’s plan and Hutchinson said more time is needed to reach common ground.

“I would expect that this is going to have to take some simmering and we’re going to have to work together. You know, it’s possible that a consensus could be arrived at very quickly and we could have some tweaks in legislation for the next session, but I wouldn’t envision another [special] session just to deal with a complicated issue like this. That should be in the general session next year,” he said in reference to when he expected a serious vote on the issue.

HIGHWAYS, TAX RELIEF
The governor has proposed a special session on highways following the current fiscal session underway in Little Rock. Hutchinson wants to use $20 million from a state rainy day fund, $20 million in surplus revenue, and around $10 million in redirected general revenue so the state can come up with $50 million to receive $200 million in matching federal funds this year. He’s open to other ideas, against a tax increase, and could envision a referral to voters, if necessary.

“I do not believe that the Arkansas voter or taxpayer wants to have an increase in their fuel tax. So that has been a parameter that has guided me in the development of our plan. The only way, if there was some mechanism, that would put that on the ballot for voters to consider, but I don’t anticipate this [special] session raising taxes to fund a highway program,” he said.

Hutchinson did say he’s open to revenue neutral tax shifts, but said those “mechanisms are very difficult.”

He’s also agreeable to adding some non-controversial technical fixes to legislation on the highway funding special session’s call.

With Arkansas Works funding secured and a strong possibility that overall Medicaid savings of a billion dollars or more and highway funding could be settled, Gov. Hutchinson was asked about his next effort at income tax relief.

Hutchinson lowered certain tax rates for those with incomes between $22,000 and $75,000 – about $100 million in tax relief – in the 2015 regular session. He has said he wants to lower Arkansas’ top tax rate from 6.9% to as low at 5% over the long haul. In terms of what Hutchinson may propose in 2017, he said it’s premature to speculate.

“I can’t answer that,” Hutchinson said. “You think about even though it’s just nine months away to the next session, we’re still waiting for the final numbers from this year as to the first year of the $100 million income tax cut that we had. I want to make sure that we’re comfortable that our economy has absorbed it, that we’re growing, that our revenue stream is sufficient, so that decision hasn’t been made… but it’s a long-term solution. I’m not sure what we’ll be able to do and what I should plan for in the next session.”

LITTLE ROCK SCHOOL DISTRICT
Last week, the controversial decision to replace popular Little Rock School District school superintendent Baker Kurrus was announced. The timing nearly disrupted the governor’s support from Little Rock Democratic lawmakers who were upset by the abrupt move.

Kurrus, who was installed less than a year ago after the state took over the state’s largest school district, will be replaced by Bentonville School District superintendent Michael Poore.

When asked: “Has Michael Poore come here to install more charter schools?”

Hutchinson said, “No. He’s come here to bring academic excellence to the Little Rock School District that is so important to Little Rock but also to our state. If you look at his history. He’s been in urban schools with a high percentage – very similar to Little Rock – in terms of free and reduced lunches, high minority populations, he’s had academic success in low achievement districts, turning them around academically. That’s what he brings and that’s the reason for that opportunity.”

Hutchinson said he wants to keep Kurrus engaged. He met with Kurrus before Kurrus left for a planned family vacation and expects to meet with him further upon his return. The governor said Education Commissioner Johnny Key’s decision to replace Kurrus with Poore won’t be reversed.

“No, the switch announcement has been made. Michael Poore will be coming in as the superintendent. We recognize all the strengths that Baker brings. We want him to be engaged. He has his heart here, so we want to be able to define that role. He wants to meet with Michael Poore and let’s see where it goes from there,” Hutchinson said.

Watch the governor’s full interview below.