Hutchinson executes line-item veto on Arkansas Works, says highway funding session is next

At about 4:15 p.m. Thursday (April 21), as reporters waited in the Governor’s Conference Room, applause could be heard through the walls separating it and Gov. Asa Hutchinson’s executive offices.

Moments later, he emerged to announce that, as expected, he had signed the law funding Arkansas Works while executing a line-item veto of an amendment that would have ended the program this year.

“The appropriation bill is signed, the funding continues, the three-fourths majority has been achieved, the majority vote of both houses,” he said. “The will of both houses and both parties has been accomplished and has been carried out.”

Hutchinson’s action came hours after the Arkansas House of Representatives voted 76-13-11 for SB121. That legislation will fund the $8.4 billion Department of Human Services Division of Medical Services appropriation, which includes $1.7 billion for Arkansas Works and also funds other programs, such as nursing homes.

Arkansas Works is Hutchinson’s version of the private option, which uses federal Medicaid dollars to purchase private health insurance for Arkansans with incomes up to 138% of the federal poverty level. As of the end of January, 267,590 Arkansans were eligible for coverage.

The controversial program was approved in a recent special session, 70-30 in the House and 25-10 in the Senate. It lacked the three-fourths majority that is required to fund all state appropriations, falling five votes short in the House and two in the Senate.

Two senators could not be persuaded to fund the division unless Arkansas Works was removed. So the Hutchinson administration and legislators created a strategy to amend the bill so that Arkansas Works ends at the end of this year, instead of in 2021 as originally stated in the bill. Once that measure passed both the House and Senate, Hutchinson would use his line-item veto to veto only that amendment, and the Legislature would not have the majority needed to override it.

The idea was to let opponents of Arkansas Works continue to vote against the program while allowing funding to move forward.

“The key thing was transparency,” Hutchinson said in the press conference. “There hasn’t been any hiding the ball. Everybody today knew exactly what they were voting on, why they were voting on it, what they were trying to accomplish. The opposition knew that. They scored it. They said this will count against you. So everybody knew what was happening. That’s not trickery. That is simply saying, ‘I will utilize my line-item veto strategy in order to accomplish something that is important for our state.’”

Hutchinson said the line-item veto strategy puts his administration “in a very strong legal position. We’re exactly where we should be. It’s as strong as any other appropriation bill that will be signed all year long.”

Still, Sen. Jonathan Dismang, R-Beebe, the Senate president pro tempore, suggested today that lawmakers may consider changing the 2016 end date back to 2021 when the Legislature meets in a special session after the current fiscal session. Such a move would require only a majority vote. Hutchinson said in his press conference that Dismang had suggested that possibility to him.

“That’s a legislative call. … It’s sort of like double-tying your shoelaces,” Hutchinson said. “If they want to double-tie the shoelace, then I’m glad to have that conversation with them. I think we’re in strong position.”

Hutchinson said he hoped Arkansas Works would not face as difficult a road next year as it did this year. He said the upcoming state and national elections will help.

“I think we resolved a lot of issues in this debate in the support that we have generated for the funding of this program, and I don’t think anybody wants to retrace those steps next year. … I expect this to go much more routinely in the future in terms of next January.”

In executing the line-item veto, Hutchinson half-jokingly said, “You had two lawyers surrounding you showing you how to do it.” He said the administration looked at how other governors have done it. On pages 21-22 of SB121, he lined through the relevant passages and wrote “Disapproved” with his name and the date. Then he drafted a veto message. The veto will go to the Senate, where it theoretically could be overridden.

Hutchinson earlier this year had announced plans to hold a special session focused on increasing money for highway spending – then later said that special session was in jeopardy if Arkansas Works is not passed. He said that special session will occur and that legislative discussions have already started.

Leading up to the fiscal session, Hutchinson had wanted the Legislature to consider implementing a managed care model for part of Medicaid. In that model, a private company would be paid a set fee per beneficiary to manage part of the program. He said those discussions are continuing.

“We have authority to do a number of things in terms of savings within DHS, and we’ll continue to pursue those,” he said. “We’ll continue the discussions in terms of what form the savings should take from a legislative standpoint.”