Senate approves Hutchinson’s ‘big bill’ to trim state government

After nearly three months of line-by-line scrutiny of one of Gov. Asa Hutchinson’s major legislative priorities to reorganize state government, the Arkansas Senate on Monday (April 8) approved a 2,047-page “monster bill” that details how the state will achieve that goal.

That proposal, House Bill 1763, was among more than 60 bills that were considered by lawmakers during a marathon session in the State Senate as the 92nd General Assembly winds down its final days of the 2019 session that began on Jan. 14, 2019. The Senate State Agencies and Governmental Affairs Committee first took up HB 1071 on Jan. 22, just eight days after the session began.

At the end of Monday’s busy Senate calendar, Sen Bart Hester, R-Cave Springs, introduced HB 1763 as part of Gov. Hutchinson’s broad legislative agenda for the 2019. The other top priorities in the governor’s $5.75 billion budget included $97 million in tax cuts for the state’s upper income bracket, a $4,000 minimum pay raise for Arkansas teachers over the next four years, and a $300 million highway program that includes multiple funding components and a $205 million voter referendum. All of those proposals have since been enacted and signed into law by Hutchinson.

In between jokes about the page-size of the bill, Hester told his fellow senators that the last time the legislature attempted such a mammoth task to trim state government was more than 50 years ago when former Gov. Dale Bumpers was in office.

“This is a big bill that does a lot,” said Hester, adding that the transformation plan was “strictly administrative” with all of the state agencies, boards and commission keeping their current funding and authority once HB 1763 becomes law.

In questioning from other senators concerning possible savings by trimming state government from 42 state departments to 15 cabinet level departments, Hester echoed earlier testimony made by Rep. Andy Davis, R-Little Rock, and Amy Fecher, the state’s chief transformation officer, that a smaller and more efficient state government would lead to annual savings of more than $15 million.

However, the Republican senator also emphasized there would be no job or personnel cuts, noting that recent agency mergers and downscaling pushed by the administration after the 2017 session have led to some early retirements and efficiencies due to duplicate positions being eliminated.

“I think there is going to be some overlapping, but the governor has been very clear that people are not going to lose their jobs because of this,” Hester explained in response to questions from Sen. Joyce Elliott, D-Little Rock. “But, I think when people retire or choose to move on to another profession or another area outside the government, those positions won’t be backfilled.”

THREE MONTHS IN COMMITTEE
Following the brief debate while Davis and House Speaker Matthew Shepherd, R-El Dorado, watched the proceedings on the Senate floor, HB 1763 was approved by a vote of 33-1 with Sen. Mark Johnson, R-Little Rock, not voting. Sen. Gary Stubblefield, R-Branch, cast the lone vote against the measure.

After the vote, Sen. Ron Caldwell, R-Wynne, chair of the Senate panel that scrutinized the nearly 2,500-page bill, thanked members of his committee for their hard work over the past three months. Led by Sens. Jimmy Hickey, R-Texarkana, and Bill Sample, R-Hot Springs, the committee has meticulously combed through 15 separate bills that detail the chain of command and authority of the 15 new cabinet secretaries and how those departments will now be set up.

Once HB 1763 is enacted into law and signed by Hutchinson, Hester said the governor’s first task will be to name the 15 new cabinet secretaries who will be responsible for implementing the transformation plan. He said the Hutchinson administration will also be responsible for providing guidance and regular reports to the legislature on the restructuring effort, including any additional expected savings from the mammoth undertaking.

INTERNET SALES TAX APPROVED, ACADEMIC DISTRESS PROPOSAL REJECTED
Earlier during the Senate’s 5-1/2 hour agenda on Monday, Senate President Jim Hendren, R-Sulphur Springs, warned his colleagues they needed to close out any of their own legislative priorities in the upper chamber because of a constitutional provision that no new bills can be filed within three days of sine die, or before the assembly adjourns.

“If any of you came up with a great idea about filing a bill, by the (Arkansas) Constitution you can’t file one within the last three days of the session,” Hendren said at the Senate podium. “So be very careful, if we really do adjourn on Wednesday, we would have a constitutional problem. So hopefully all of your bills have been filed.”

Following Hendren’s marching orders, lawmakers spent the next several hours looking to get last-minute House and Senate bills pushed through the chamber and enacted into law before they end more than 90 days of legislative sausage-making in Little Rock.

Among other key bills that were approved by the Senate Monday was SB 576, which will require out-of-state remote sellers that do not have a physical presence in the state to collect and remit Arkansas sales and use taxes, among other things. That bill, also sponsored by Hester, will further extend net operating losses (NOL) for Arkansas businesses from five to 10 years, adopts a single sales factor apportionment corporate tax model, and decreases the corporate income tax rate from 6.5% to 5.9%.

The bill came back to the Senate after the House amended an earlier version of the bill that would remove the exclusion on coin-operated car washes, and further levy a 6.5% water fee on all car washes in lieu of a sales and use tax. The amended 33-page proposal approved last week by a House committee will cut that monthly water fee in half. The Senate approved the measure by a vote of 31-3. It now heads to the governor’s desk to be enacted into law.

The Senate also rejected SB 668 by Sen. Kim Hammer, R-Benton, a controversial measure that would allow the state Department of Education to take control of school districts in academic distress for an additional four years above and beyond the state’s current five-year takeover period. It failed by a 16-5 vote. It needed 18 votes for passage.

Sen. Bob Ballinger, R-Berryville, also asked the Senate to send his controversial “stand your ground” bill back to committee for further study. He said he wanted to table SB 484 so the legislature could bring it back up again by the 2021 session. In committee, heated debate on the measure led to an unfiltered and sometimes profanity-laced speech by Sen. Stephanie Flowers, D-Pine Bluff, that went viral nearly a month ago, getting more than 10 million video views on social media.