Spending bill goes to Gov. Hutchinson; InvestArk safe in highway session

With the Revenue Stabilization Act that funds much of state government on his desk, Gov. Asa Hutchinson Thursday was looking ahead to a special session focused on highways that he said will begin 10 a.m., May 19.

Hutchinson said in a press conference that he won’t issue the call for the session until there’s more consensus on the issues to be discussed. Earlier in the day, Senate President Pro Tempore Jonathan Dismang, R-Searcy, told his Senate colleagues the session will occur May 19-20 and be finished that Monday, May 23.

However, the session’s structure has begun coming into focus. Hutchinson needs about $50 million in state funds to qualify for $200 million in federal highway matching funds next year. In order to do that, he will ask lawmakers to transfer $40 million in rainy day funds out of general revenues to the Arkansas Highway and Transportation Department.

Also, money from sales taxes collected from purchases of new and used vehicles will be transferred to highways. That money will be offset by $20 million in improved investment returns generated in the state treasury, Hutchinson said. Those improved returns also will add $12 million for highway funding in fiscal year 2018 and $5 million in fiscal year 2019.

This would be the first time that general revenue funds have been used for highways, a move that has concerned supporters of other state priorities, such as public schools, who fear their share of the pie will grow smaller. The offsets are meant to address those concerns. Earlier discussions had included potentially cutting the Arkansas Economic Development Commission’s InvestArk program, which provides incentives to large employers that make capital improvement projects.

Hutchinson said cutting InvestArk is now off the table. The potential cut had drawn opposition from economic developers, business interests and others.

Earlier in the day, Speaker Jeremy Gillam, R-Judsonia, said legislators are agreeable to Hutchinson’s highway plans, but many want a transfer of general revenue funds to highways to be accompanied by greater oversight of the constitutionally independent Highway Department. Other ideas for highways are floating around the Legislature. Gillam said those ideas generally are long-term proposals.

Rep. Michael John Gray, R-Augusta, the Democrats’ House minority leader, told reporters Thursday that Hutchinson “must take some leadership here and look for new revenue solutions” for highways. Hutchinson ruled out a tax increase, saying, “Arkansans are able to enjoy for the first time a little bit of extra jingle in their pocket because of lower gas prices. I did not want to take that away.” However, he said a tax increase later could be approved by voters through an initiated act.

Hutchinson said the session call also will include a bill that would change the sunset date of his Arkansas Works program. The program will continue the state’s private option program, which uses federal Medicaid dollars to purchase private insurance for Arkansans with incomes up to 138% of the federal poverty level.

It passed in a special session earlier this year but was funded in the fiscal session only after Hutchinson used his line-item veto to change the date it would end. After supporters were unable to muster the three-fourths majority needed for funding in the Senate, they amended the bill so that it would end at the end of this year rather than 2021. Hutchinson then vetoed that amendment.

The arrangement made it easier for two Senate opponents of Arkansas Works to vote to fund the part of the budget that includes the program, but some supporters are concerned about the legality of the move. While Hutchinson called the strategy “a creative means of using the constitutional tools that are available to me,” he said he would agree to the requests of legislative leaders to change the law.

As for other potential issues that could be included in the call, Hutchinson said he is waiting to see what consensus develops among legislators and other groups, and also is considering if legislation should be enacted now or if it can wait until next year’s regular session. Earlier, he had expressed an interest in legislation that would separate the state holidays honoring Dr. Martin Luther King, Jr. and Confederate Gen. Robert E. Lee. He said a consensus has not developed on that issue, and it will not be on the call.

Gillam said other issues likely to be addressed include, among others, an effort to reconstitute and strengthen the state’s levee boards, and a bill to clean up some of the state’s redundant task forces.

Hutchinson’s comments came hours after the House and Senate approved each other’s identical versions of the Revenue Stabilization Act, which funds state programs. The $5.33 billion spending bill passed in the House 87-5 with three not voting. In the Senate, it passed 25-6 with an emergency clause, with four not voting, after earlier not gaining enough votes to pass with an emergency clause.

The act closely resembles the budget Hutchinson presented to legislators before the session began.

The most controversial measure involved the appropriation for the Department of Workforce Services. It included an amendment by Rep. Jim Dotson, R-Bentonville, requiring the department to seek a waiver, like one given to Texas, that would create greater accountability for federal Temporary Assistance to Needy Families funds. Beneficiaries now access those funds through an automatic teller machine. Dotson said mechanisms are needed to ensure the money is spent for needs such as food and clothing.

“If you qualify for it, I want you to get the benefit, but I want to make sure it’s going toward the intended purpose,” he said in an interview.

Sen. Linda Chesterfield, D-Little Rock, voted against the Revenue Stabilization Act in part because of that measure. She said afterward it will be a costly effort and is an unfair attack on poor people who are receiving a temporary, small government benefit.

“We might as well say we’re going to put a scarlet letter on the poor and say, ‘You can’t do anything.’ And if you’re going to do that, then you need to do it for everybody that receives government assistance” such as farmers and corporations, she said.

Legislators will adjourn sine die on Monday, meaning they’ll go home for good. Gillam is the only candidate for House speaker and is expected to be elected to another term that day, making him the fifth multi-term House speaker in Arkansas history.

Hutchinson said he does not anticipate any more special sessions this year but is leaving open that possibility.

In other business, he expressed concern about the tone of Donald Trump’s presidential campaign but reiterated his pledge made Wednesday to support the Republican Party nominee. He expressed concern that Trump’s trade protectionist policies could harm Arkansas and said he would like to help shape Trump’s security and foreign policy.