Category Archives: Legislature

State tax cuts: First answer ‘How?’ and then ‘How much?’

By Steve Brawner
© 2017 by Steve Brawner Communications, Inc.

Your state taxes were cut by $100 million in 2015 and about half that much this year. In 2019, Gov. Asa Hutchinson and state legislators intend to cut them again.

But with state budgets growing tighter, “How?” is a more important question than “How much?”

To answer both questions, and others, legislators during this past session created a task force that will study the state’s tax code before producing proposed legislation by September 2018, 16 months from now.

The Tax Reform and Relief Legislative Task Force met for the first time Monday and elected two level-headed and practical-minded co-chairmen, Rep. Lane Jean, R-Magnolia, and Sen. Jim Hendren, R-Gravette. Jean is co-chairman of the Joint Budget Committee, while Hendren, Hutchinson’s nephew, has co-chaired two other task forces, one for school employees’ health insurance and one for health care.

For the rest of us, there’s non-teacher retirement

By Steve Brawner
© 2017 by Steve Brawner Communications, Inc.

Could Arkansas’ efforts to strengthen a program serving 43,000 offer an example for Congress to fix programs serving 60 million?

During this past legislative session, Arkansas lawmakers took steps – baby steps for sure, but steps – that might shore up the state’s Teacher Retirement System. Actuaries had determined it would take the system 29 years to catch up with the payments it will make to current and future retirees, and that’s too much. In the past, 30 years was considered acceptable, but the Government Accounting Standards Board has lowered that number to 18. Anything longer risks hurting the state’s bond rating and increasing the borrowing costs for schools and roads.

$23.33 less debt

By Steve Brawner
© 2017 by Steve Brawner Communications, Inc.

The past couple of weeks showed two different ways to react when you don’t have enough money coming in: the Arkansas state government reaction, which is relatively effective, and the federal reaction, which isn’t at all.

Why the difference? One big reason is that Arkansas has a structure for responding to budget shortfalls and, more important, a culture that respects that structure. The federal government has neither nor the structure nor the culture.

Let’s start with Arkansas. The state’s budgetary decisions are governed by the Revenue Stabilization Act, a law passed in 1945 that is amended by the Legislature each budget cycle and sets the parameters for a balanced budget. Under the act, state spending is divided into categories: an essential Category A and a much smaller, spend-it-if-we’ve-got-it Category B.

Can work be added to Arkansas Works?

Cindy Gillespie is director of the Department of Human Services.
By Steve Brawner
© 2017 by Steve Brawner Communications, Inc.

Next week, legislators will meet in special session to change the Arkansas Works program to encourage its recipients to work for their benefits and, eventually, no longer need them.

Changing the program will be reasonably easy. Changing the recipients will be much harder.

Arkansas Works, formerly known as the private option, uses federal Medicaid dollars to buy private insurance for 311,000 Arkansans with incomes up to 138 percent of the federal poverty level, or about $17,000 for an individual. The state pays 5 percent of the program’s cost this year and 10 percent by 2020. The federal government pays the rest.

It was created through the Affordable Care Act, otherwise known as Obamacare, which expanded Medicaid. Many Republican-leaning states declined to participate. Arkansas instead obtained a waiver from the Obama administration allowing it to buy private insurance rather than simply enroll recipients in Medicaid.