Gov. Asa Hutchinson's proposed $100 million income tax cut and his speech Thursday on health care policy, including the private option, stand to dominate this week's work in the General Assembly.
"We are just getting through the formalities of getting started," Senate President Pro Tempore Jonathan Dismang, R-Searcy, said about the legislative session, which started Jan. 12.
After a week of ceremonies and inaugural festivities, House Speaker Jeremy Gillam, said Friday that he expects things to start speeding up. "I look for us to kind of start cranking a pretty good pace next week and kind of get the ball rolling as we pick up steam," the Judsonia Republican said.
Lawmakers will convene Tuesday at the Capitol after a four-day break.
Hutchinson, a Republican from Rogers, was sworn in Tuesday.
He is urging legislators to swiftly approve Senate Bill 6, a tax cut for the middle class, so he can make good on his campaign pledge to reduce that income tax rate by 1 percentage point.
The bill, sponsored by Dismang, would reduce the income tax rate from 7 percent to 6 percent for those making between $35,100 and $75,000, and from 6 percent to 5 percent for those making between $21,000 and $35,099, starting next year. The legislation also would delay for a year implementation of certain 0.1 percentage point income tax cuts scheduled to go into effect this year.
Hutchinson has estimated that the legislation would reduce state general revenue by $33.7 million in fiscal 2016 and $102 million in fiscal 2017.
Dismang said he would like the Senate Revenue and Taxation Committee on which he serves to advance his bill Wednesday.
Committee chairman Sen. Jake Files, R-Fort Smith, said he has asked Hutchinson to provide "at least some numbers" to show the effect of the proposed tax cut on the state budget for fiscal 2016.
"If we do [get the numbers], there's a good chance that we could vote [on SB6] on Wednesday," Files said.
"If [the tax cut] is reflected in the budget and can be done responsibly, yes I am," voting for SB6, he said.
Hutchinson has promised to release his proposed fiscal 2016 budget this week.
Hutchinson spokesman J.D. Davis said Friday that the exact day of the release is "not set in stone yet."
Former Gov. Mike Beebe had earlier recommended that lawmakers delay the implementation of two previously approved tax cuts that were projected to reduce state 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.
The delays were needed, Beebe argued, to avoid cuts in college and university funding, and to grant the employees cost-of-living raises.
Hutchinson said he would reveal his stance on Beebe's recommended tax cut delays when he releases his fiscal 2016 budget this week.
House Revenue and Taxation Committee chairman Joe Jett, D-Success, said "my baseline is that any tax cuts are fiscally responsible and benefit Arkansas' working families.
"I look forward to learning about the Governor's priorities when he presents his budget next week," Jett said Friday in a written statement.
Hutchinson said he'll include in Thursday's speech whether he wants the Republican-controlled Legislature to reauthorize the private option health-insurance program.
Hutchinson -- along with two legislative leaders and two Hutchinson administration officials -- met Friday in Washington with U.S. Health and Human Services Department Secretary Sylvia Burwell to talk about how much flexibility the state has in obtaining waivers for the taxpayer-funded private option.
Hutchinson has suggested that people on the private option either be working, receiving job training or attending college, noting that 40 percent of private-option participants report having zero incomes.
The private option deeply divided Republicans on the campaign trail last year, and during the 2013 and 2014 legislative sessions.
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 in order to use federal Medicaid funds for the private-option program.
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 will 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.
In its 2013 and 2014 sessions, the Legislature barely reached the three-fourths vote threshold required 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 spoke against the health care program during their campaigns.
Dismang, who is one of the three legislative architects of the program, said Friday that "I honestly do not" know what Hutchinson will say in his speech Thursday.
Gillam said he expects Hutchinson "will give a pretty clear indication of the scope of what he is looking at and then the methodology of how he wants to approach it" in his speech.
"I think it will be extremely important to the overall discussion of health care," he said.
State Rep. Joe Farrer, R-Austin, who has voted against funding the private option in the past, said he expects Hutchinson to propose "a compromise" on the private option in his speech.
He said he expects the private option to still exist a year or two from now.
"It will be in a different form," Farrer said, declining to speculate on what the changes would be.
Metro on 01/19/2015