A legislative panel on Tuesday endorsed Gov. Asa Hutchinson's requests for up to $10.4 million in one-time state funds for county jail reimbursements, Medicaid rate increases for certain providers, and improvements at Camp Couchdale.
By voice vote the Legislative Council's Performance Evaluation and Expenditure Review subcommittee recommended that when the council meets Friday, it approve the Republican governor's requests to transfer rainy-day funds to the three programs.
Hutchinson requested a transfer of up to $4.5 million to the Arkansas Department of Corrections, a transfer of $3.4 million to the Arkansas Department of Human Services and a transfer of $2.5 million to the Arkansas Division of Career and Technical Education for Camp Couchdale, which is owned by the Arkansas FFA Foundation.
The state's rainy-day fund currently totals $27.2 million and will have $16.8 million remaining if the council gives final approval Friday to the governor's requests, according to Bureau of Legislative Research analyst William Parrish.
The Corrections Department needs up to $4.5 million more to help reimburse county jails for housing state prisoners beyond its current fiscal 2020 funding of $18.2 million, primarily because more inmates under the Division of Community Correction are being housed in county jails, department spokeswoman Dina Tyler said after the subcommittee meeting.
The number of state inmates under Corrections Department responsibility in county jails totaled 1,261 on Tuesday, compared to 1,434 on the same day a year ago, while the Community Correction Division's state inmates in county jails totaled 394 on Tuesday, compared to 141 on the same day a year ago, she said.
Department of Corrections Secretary Wendy Kelley said Act 423 of 2017 allows the department "to send people [to county lockups] for sanctions only, turn those beds over quicker and not send them back to the prison.
"That's where this increase is coming from, so it's a positive reflection of the criminal justice reforms that y'all have made," she said. "As long as they do what they are supposed to in the county jails, then they will get released at the end of that 45-day or 90-day period, and they won't go back into the prison system."
State budget administrator Jake Bleed told lawmakers that typically, officials would make supplemental budget requests during legislative sessions, but because next year's fiscal session will be held in April instead of February because of the presidential primary on March 3, "we can't do that."
"We are going to run out of money," Bleed said.
The $3.4 million in one-time funds recommended for the Human Services Department's Division of Medical Services would be used for Medicaid rate increases for providers of adult developmental day treatment, early intervention day treatment and personal care services.
These rates are increasing by a total of about $11.3 million in state and federal funds for the six-month period starting Jan. 1, and the state's share is the requested $3.4 million, department spokeswoman Amy Webb said after the meeting.
Some of the rate increase is a result of the raise in the state's minimum wage that begins in January, but there are other factors, she said.
The Human Services Department has been reviewing the rates it pays Medicaid providers, she said, noting that the governor issued an executive order earlier this year directing the department to conduct regular rate reviews at least once every four years for all classes of Medicaid providers.
"These rate increases are not something that were budgeted for as part of our regular Medicaid budget," Mark White, chief of legislative and intergovernmental affairs for the department, told lawmakers.
White said the rate increase for personal care services providers will be about 1.4%, and about 11% for adult developmental day treatment and early intervention day treatment providers, effective Jan. 1.
The rate for personal care service providers will increase from about $18 to $18.24 an hour, White said.
Afterward, Webb said the rate for adult development day treatment providers will go from $10.60 to $11.77 an hour and for early intervention day treatment providers from $16.46 to $18.27 an hour.
White said that the last increase for the adult development day treatment and early intervention day treatment providers was in either 2008 or 2009.
Rep. Dan Douglas, R-Bentonville, said the state's minimum wage was $8.50 an hour in 2018 and will be $10 an hour in 2020 and $11 an hour in 2021.
"According to some providers I have talked to, they're losing money right now or just barely breaking even, and a lot of them will go out of business," he said. "[Medicaid recipients] will have to transfer into nursing homes, where we pay $5,400 a month instead of $1,500 or $1,600 a month."
White described the rates as "interim" and calculated as "the cost of doing business as of Jan. 1, 2020."
"As you indicated there are other changes coming down the pike between now and 2021, so we are going to continue to look at that and see if there is additional data that we can get," he said.
The panel's recommendation that the Legislative Council approve the governor's request for $2.5 million for Camp Couchdale came nearly two weeks after Hutchinson told the Arkansas Farm Bureau's annual convention that he made this request in response to a letter from the Farm Bureau for funds for the camp.
Warren Carter, executive vice president of the Farm Bureau, wrote in a letter dated Oct. 29 that "we seek your consideration and support for the planned renovations and enhancements at Camp Couchdale, the heartbeat and epicenter for Arkansas FFA, where more than 1 million young Arkansans have spent time since its opening in 1935."
The camp is located southeast of Hot Springs.
The Arkansas Farm Bureau is fully committed to assisting the Arkansas FFA Foundation "in a meaningful way," Carter said in his letter.
Department of Education Secretary Johnny Key said in a letter dated Dec. 3 to Bleed that the $2.5 million grant will allow Camp Couchdale to update and refurbish its facilities, update technology and add an agriculture mechanics lab.
"The modernized space will also include career and technical education facilities for both students and educators," Key wrote.
In response to questions Tuesday from Sen. Jimmy Hickey, R-Texarkana, Jennifer Cook, director of the Arkansas FFA Foundation, told lawmakers that state funds will allow phase one of the project to be completed, "which then leaves us another $2.5 million that we will be soliciting from corporate donors and individual gifts."
She said Nabholz Construction officials will meet with foundation officials Jan. 2 at Couchdale "to discuss what we're wanting to do with the ag mechanics lab specifically."
"They are very interested in us because of some apprenticeship programs that they have for students in the Springdale area, so they are wanting to be heavily involved in how we proceed," she said. "Their desire is to see if they want to build the shop for us with their ideas on the types of additional equipment that we would include also, so that doesn't necessarily mean they will have the end say in everything that we do."
Sen. Gary Stubblefield, R-Branch, suggested considering other contractors beyond Nabholz.
Metro on 12/18/2019