Week In Review

State Capitol Week in Review

        LITTLE ROCK –  After a busy opening week at the Capitol, the major issues of the 2013 regular legislative session began coming into focus.

        In his State of the State speech to a joint session of the Senate and House, the governor outlined his legislative agenda.  At the top of the list was expansion of Medicaid to add 250,000 people to the 780,000 Arkansans who now qualify for services.  The complexity of the issue guarantees that it will be on the front burner from now until the final days of the session.

        Legislative leaders have serious concerns about expanding Medicaid.  They question whether the state can afford such a large expansion of a government program.  They anticipate that Medicaid expansion would mean the creation of a vast new bureaucracy.

        The governor argued that expansion was critical for rural hospitals, whose Medicare reimbursements are being reduced, and in some cases reduced severely. 

He also argued that putting more people on Medicaid would benefit everyone who buys private health insurance, because factored into everyone’s premiums are the costs of providing medical care for free to people who don’t have coverage.  He said people with health insurance were paying a “hidden tax” because a part of their premiums pay for treatment of people without insurance.

The governor also wants to eliminate the remainder of the state sales tax on groceries.  In order not to lose the revenue generated by the food tax, the governor’s plan calls for repeal of the food tax only if an increase in state revenue results from consistent declines in government expenses, such as bond payments and payments the state makes for desegregation of Pulaski County schools. 

If the federal courts end the state’s obligation to make annual desegregation payments, the repeal of the remaining grocery tax would likely take effect.

If the state sales tax on food is repealed, there would still be local option sales taxes and the 1/8 cent sales tax that goes for conservation levied on groceries.  Voters approved the conservation tax in 1996 in a statewide election.

The chairman of the Senate Education Committee filed SB 65, legislation to replace the Arkansas law on school choice, which was stricken by a federal judge last year.  The state’s appeal was heard by the Eighth Circuit U.S. Court of Appeals last week.  If the state loses on appeal, Arkansas would be without a school choice law unless SB 65 is enacted.

The chairman of the Senate Judiciary Committee filed SJR 2, a proposed constitutional amendment that would restore many of the provisions of the original 2003 tort reform act that have been stricken by the courts as unconstitutional.  If lawmakers adopt SJR 2, the measure would be on the general election ballot in November of 2014.

The Judiciary Committee chairman also filed SB 38, to require that people who receive unemployment benefits be tested for illegal drug use.

        The chairman of the Senate Insurance and Commerce Committee voiced his opposition to the state being a partner with the federal government in setting up a health insurance exchange.  He said he preferred that a federal agency run the Arkansas exchange, and he may file legislation to stop Arkansas from being a partner.

The federal law will require everyone to buy insurance, and individuals and small businesses can shop for coverage through the exchanges.  States can set up their own exchanges, or they can partner with the federal government or they can allow the federal government to operate the exchange. The chairman of Insurance and Commerce said he prefers the last option.