Lawmakers approve state budget after amending Treasurer’s Office appropriations, expect to adjourn Friday

The Arkansas Legislature on Thursday (March 8) put most of the finishing touches on the 2018 fiscal session after the House approved the balanced budget for the biennium and stripped a controversial amendment out of the state Treasurer’s Office appropriations to gain full approval from the 100-member body.

Before tackling the proposed $5.44 billion budget, the House first acted to approve twice-rejected House Bill 1122 after a “special language” amendment was inserted into the state Treasurer Department’s budget that would allow deductions for so-called federal 529 college savings accounts.

Shortly after the body convened in the morning session, House Speaker Jeremy Gillam, R-Judsonia, came to the floor well for the second consecutive day and said the Treasurer Department’s appropriations bill did not have the support necessary to get the 75 votes for the measure after some members complained that were caught off guard by the 529 amendment.

Gillam then asked the members to support a motion to send HB1122 back to the Joint Budget Committee to strip out the revision, so it could then be added to the gaggle of bills considered by the legislature in the upcoming special session after the assembly sine dies on Friday.

“Sometimes this process doesn’t go as we would like for it to go, how we think it should go, but as I stood before you here yesterday and asked us to do what is necessary to be responsible to citizens that we have taken an oath to represent in this state, I now come before you to ask support for this motion,” said a disappointed Gillam.

Gillam then told House members he has talked with Gov. Asa Hutchinson and Senate leaders and all agreed to place the issue on upcoming special session call. After the motion was approved and House recessed, it took the Joint Budget panel took less than 30 seconds to strip out the 529 amendment so that the House would have a “clean appropriations bill,” said Rep. Lane Jean, R-Magnolia, co-chair of the joint legislative panel.

According to the Treasurer’s Office, Arkansas needs to fashion a “legislature fix” to comply with recent changes in the $1.5 trillion tax reform package approved by Congress in December. Jean said Gov. Hutchinson assured House leaders he would take up the tax measure during the special call, saying support HB1122 fizzled before Republican supporters could bring it back up for a third vote on the chamber floor.

“I think we lost even more votes today. This gets what everybody wants accomplished. The Treasurer’s budget gets funded and they will clearly have the votes in the special session,” said the Republican budget hawk.

After the House reconvened in the afternoon session, HB1122 was easily approved by a margin of 84-3 and 12 non-voting members. The measure failed by a vote of 74-14 on Wednesday.

Jean said he expects House Speaker Gillam will draft new legislation for the special session to help more than 27,000 Arkansas families to get a tax deduction of up to $10,000 for participating in the savings plan originally designed by Congress to help families put money in escrow for future college expenses.

Despite removing the 529 amendment from the bill, Democrats were still chagrined about efforts to insert the measure in to the Treasurer’s budget to circumvent normal legislative protocol and then accuse Democrats of supporting a “government shutdown.” Rep. Charles Blake, D-Little Rock, told reporters that the Democratic caucus will hold strong until there is a policy debate on 529 accounts, which he said favored wealthy families that make more than $100,000 and pull needed state revenue from public schools and transfers it to families look to pay for private school expenses.

BUDGET CRITIC
House members also easily approved HB1137, the so-called Revenue Stabilization Act (RSA) that allows lawmakers tp transfer tax revenues into budget coffers to fund the state’s $5.44 billion fiscal 2019 budget, which begins July 1. The measure, which will increase state spending by $172 million or 3.1%, was approved by a vote of 87-5. Only five members, four Republicans and one Democrat, voted against the measure with seven legislators not voting. Still, Rep. Josh Miller, R-Heber Springs, came to well and criticized Gov. Hutchinson and his fellow lawmakers for increasing the budget.

“I can go home and spit in the Greer’s Ferry Lake trying to raise the level and probably have more effectiveness than I am having right now. But I am going to give it a shot anyway,” Miller said. “I just want to be clear and be public, and I know I’m not going to change anyone’s mind …, but for the sake of the public, I want to make it known, this is not a conservative budget at all. We are not fixing the problems that our state faces.”

Miller said state lawmakers have not addressed ways to pay for state highway improvements and other infrastructure needs, adding that Arkansas taxpayers voted for conservative government but were not getting that.

“I just want to say that the people of this state over the last few election cycles have voted for conservative, common-sense governing, and they are not getting that,” said Miller, who has public endorsed Republican Jan Morgan for governor.

UPCOMING SPECIAL SESSION
House and Senate lawmakers are expected to adjourn the fiscal session on Friday, smoothing the way for Gov. Hutchinson to call a special session early next. Last month, the Republican governor said he would call lawmakers into a special session after the 30-day fiscal session to address the need to regulate so-called pharmacy benefit managers, or PBMs, which act as middlemen between insurance companies and pharmacies.

PBMs have been an issue since Jan. 1, when Arkansas Blue Cross and Blue Shield began contracting with CVS Caremark as its pharmacy benefit manager. CVS Caremark was already serving as the PBM for Ambetter, another health insurer in Arkansas.

Besides PBMs, other draft bills are circulating at the Capitol and lawmakers are whipping up support for a variety of different measures they would like to see included on the special session call, including the 529 savings accounts, open container laws, bingo legislation and handling of ADEQ permits. J.R. Davis, spokesman for Gov. Hutchinson, said a decision on special session call items has not been finalized and won’t likely be determined until early next week.