As he prepares to be sworn in Tuesday as Arkansas' 46th governor and the fourth Republican governor since Reconstruction, Asa Hutchinson said he won't call his first months with the Republican-dominated Legislature a honeymoon -- even if others use the term.
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"I just would resist that terminology," said the 64-year-old former congressman, federal Homeland Security undersecretary and director of the U.S. Drug Enforcement Administration.
"I think what we have is a great partnership that naturally exists, and it is just a favorable relationship with [Senate President Pro Tempore Jonathan] Dismang and [House Speaker-designate] Jeremy Gillam," Hutchinson said in an interview last week in his transition office east of the state Capitol in Little Rock. The 2015 regular legislative session starts Monday.
"There is such a desire for us to be successful as a team in this session, and I think that is going to continue," he said.
"Now, we are going to have some disagreements, and I think the question is how well we are going to get over those disagreements, and I think that will be fine," he said.
Hutchinson said he'll say whether he wants the Legislature to reauthorize federal funding for the private option during "a major speech" on health care changes before the end of this month. Under the private option, the state uses federal Medicaid dollars to purchase private health insurance for some Arkansans.
The private option was an issue that deeply divided Republicans on the campaign trail and during the 2013 and 2014 legislative sessions.
"There is enough excitement with the Republican takeover of state government and good will towards Hutchinson that he's going to have a good session," said Hal Bass, a political science professor at Ouachita Baptist University in Arkadelphia.
"There is a postelection glow that hasn't dissipated yet," he said.
Hutchinson wants the Legislature to pass a $100 million tax cut early in the session, a measure that Bass said will be politically popular compared with the "tough sell" of reauthorizing the private option.
Critics call the private option "Obamacare" because funding for the program is made available under the federal Patient Protection and Affordable Care Act that was signed into law by President Barack Obama in 2010.
Supporters say the private option isn't Obamacare because the private-option program was created and run by Arkansans and differs substantially from the federal model. Arkansas had to get federal waivers to be allowed to use the federal Medicaid funds to pay for private health insurance for thousands of Arkansans.
"I have pushed from Day One for a good profile as to who is on the private option," Hutchinson said of the program that state officials say helps the working poor.
"It is an amazingly challenging task. You have 200,000 people on that, and the first statistic I got -- which was after the election -- was 40 percent of those have zero income," he said.
The program extends insurance coverage to adults who have incomes of up to 138 percent of the poverty level -- $16,105 for an individual, for instance, or $32,913 for a family of four. More than 180,000 Arkansans have enrolled in private health insurance through the private-option program, according to the state Department of Human Services.
Federal Medicaid funds pay for 100 percent of the program until fiscal 2017, when the state will pick up 5 percent of the cost. The state's cost will gradually increase to 10 percent by fiscal 2020.
Hutchinson said he's seeking more information about the people enrolled in the program and plans to consult with federal government officials about how much flexibility they'll grant the state for "overall health care reform."
"If we are having a private-option or taxpayer-funded health insurance, people either should be working, ... in training or going to school in some fashion. Those are the incentives and help to get ahead in life and move up the economic ladder rather than an incentive to say 'Hey, my life is grand,'" Hutchinson said. "This is where I want to press the limits of what kind of waivers we can get [from the federal government]."
Bo Ryall, chief executive officer for the Arkansas Hospital Association, noted that Pennsylvania plans to offer job training and placement services to Medicaid recipients, and Utah Gov. Gary Herbert has proposed enrolling unemployed recipients in a jobs program.
"The federal government won't allow you to mandate that someone have a job before they receive services, but there's job referral services that can work and hopefully will help some on the issues on personal responsibility," Ryall said last week.
In the 2013 and 2014 sessions, the Legislature barely reached the three-fourths vote threshold required in the House and Senate to authorize funding for the program.
The fate of the private option is likely to hinge on the votes of newly elected lawmakers, many of them Republicans who were elected partly because they opposed the health care program.
Hutchinson said he hopes the legislation to enact his tax-cut package will be introduced in a matter of days and be approved after he unveils his proposed fiscal 2016 budget later this month.
During his campaign, Hutchinson said he would ask the Legislature to cut the state's income tax rate from 7 percent to 6 percent for people earning between $34,000 and $75,000, and from 6 percent to 5 percent for those earning between $20,400 and $34,000.
Hutchinson has said his tax-cut plan would reduce state general revenue by $50 million in fiscal 2016 and $100 million in fiscal 2017.
"In the short term you have got surplus or a growth in revenue that can help fund the tax cut in the first year," he said. "Over the long year, you have to build it into the budget and you do look at savings or slowing the growth of Medicaid funding over the long term. That should be happening whether you are trying to fund tax cuts or not. That's good management of the Medicaid program."
Departing Democratic Gov. Mike Beebe has recommended that lawmakers delay implementation of two previously approved tax cuts that are projected to reduce revenue by $29.4 million in fiscal 2016 and $24.5 million in fiscal 2017. Those cuts would reduce the sales tax on natural gas and electricity used by manufacturers, lower income taxes on capital gains and increase the standard personal income tax deduction.
In addition, a law cutting the state's personal income tax rates by 0.1 percent has been phased in over last year and this year.
The 0.1 percent income tax rate cuts will reduce state general revenue by $55.7 million during the first full year of implementation in fiscal 2016, according to the state Department of Finance and Administration.
Hutchinson said delaying some of these tax cuts "is on the table" for discussion with state lawmakers.
But Sen. Jake Files, R-Fort Smith, chairman of the Senate Revenue and Taxation Committee, said senators aren't sending signals to him showing their interest in delaying any of the tax cuts.
"I didn't know any delays were on the table," he said, adding that he hasn't heard of any senator talk about being interested in any delay of any tax cut.
In fact, Files said he hopes the Legislature will consider enacting tax cuts beyond Hutchinson's $100 million proposal.
"In a $5 billion budget, there are going to be opportunities for more tax cuts without killing things," he said.
After he's sworn in on Tuesday, Hutchinson said he'll sign an executive order that day imposing a hiring freeze so that state agencies reporting to him will be required to get a waiver from the governor's office to fill open positions.
"There are some critical positions that are unfilled now that I just want them to be able to get a waiver from us if they are going to fill those," he said.
"If we don't think that position needs to be filled [and] you haven't made a good case for that, then we have an opportunity to save the taxpayers money," Hutchinson said.
In his first day as governor, Hutchinson said he'll also sign an executive order requiring his office's approval of new regulations proposed by state agencies that report to him.
"I want to make sure that the agencies that report to me do not enact new regulations that burden business without having the approval of the governor's office first," he said.
In addition, Hutchinson said he'll start dialing "my call list of industry prospects for coming to Arkansas" on his first day on the job.
Hutchinson said he hopes the Legislature will pass a law early in the session to have computer-science courses count toward core high school graduation credits in math or science, so that each high school offers computer-science courses.
He said he'll also ask the Legislature later in the session to create eight regional councils to guide the state's fragmented workforce-training program after he appoints a director of the state Department of Career Education.
During his campaign, Hutchinson said he wanted more supervision of parolees, longer parole-revocation periods, more support for state law enforcement and drug task forces, more funds for drug-treatment programs, and changes in a 2011 state law that reduced sentences for drug crimes and theft.
He said many of those criminal justice changes will be sought in this year's session, and some will probably be left over for a working group to work on and build some consensus on for the future.
Hutchinson is succeeding Beebe, who has been governor since 2007, and says he hopes the transition will be smooth.
"Despite our best efforts, sure there are going to be glitches. There are going to be things that are not handled right. We are going to try to minimize that," said Hutchinson.
"I have been meeting regularly with [Deputy Finance Department Director] Tim Leathers and [state budget administrator] Brandon Sharp, and we have such good public servants that are out there that are committed to our state government's success, I don't think we are missing a beat," he said before he appointed former Economic Development Director Larry Walther as the finance director.
Hutchinson said his administration is starting its search for a director for the state Economic Development Commission and he'll ask the Legislature to approve a measure allowing the director's $139,706 annual salary to be supplemented with private funds from the state Economic Development Foundation.
"My style is to be engaged in the details, that's part of who I am and my leadership style, so hopefully that will give me an early warning sign to any problems," Hutchinson said.
Information for this article was contributed by Andy Davis of the Arkansas Democrat-Gazette.
A section on 01/11/2015