Arkansas Lawmakers Clear Most Hurdles of Special Session

Oct 18, 2013

Members of the Arkansas Legislature are on the verge of wrapping up a special session to avoid rising insurance premiums for public school employees.  Lawmakers are to return at 12:01 am Saturday to give a final approval to a number of bills. Arkansas Law forbids the House and Senate from voting on identical bills on the same day.

Several bills will redirect school funds and surplus money to the teacher insurance program. The measures fix the program at least for the foreseeable future. Many legislators and Governor Mike Beebe still agree though, that long-term structural changes are needed.

Members of the general assembly passed measures to create a legislative task force and reconfigure the Employee Benefits Division Board to look at possible solutions during future sessions. On the floor of the House, Democratic Representative Tommy Wren said the task force will have a lot of work to do.

“I don’t think going forward that any of us know the answer to this problem to this health insurance crisis that we have,” he said. “But I think this task force will work together, it will be members of the legislature…It’s an opportunity for all 135 of you, 100 house members and 35 senators to be involved and find a fix for this problem.”

Before the session began,  public school employee insurance faced a 54 million dollar shortfall, with premiums set to rise 50 percent for those enrolled in the program.

Measures that gradually siphon funding away from school facilities and teacher professional development programs were part of the legislative package that will help patch up the insurance program. On top of that, 43 million dollars in state surplus money will go to ensure that premiums rise only 10 percent next year. Speaking to reporters, Governor Beebe said he’s sure the long-term future of the program looks good, as long as the-soon-to-be created task force can find a solution.

“I’m absolutely confident that the task force will be very serious and we’ll help them any way that we can to try to ensure a systemic change that will allow the system to be more viable,” he said.

Although most of the legislative package to direct funding to teacher insurance advanced, a measure to allow the state to collect the entirety of a base rate of 25 mills of property taxes from school districts died narrowly in the House Education committee after it had been tabled earlier. The tax is known as the Uniform Rate of Tax or URT.

Arkansas already mandates that school districts collect 25 mills in property taxes to meet a per student funding minumum (25 mills equals 2.5 percent of a property's assessed value). Districts that end up collecting more than the per-student funding rate are currently allowed to keep that excess money.

The failed measure would have mandated that any school district that collects above the minimum amount would have to return that money back to the state's public school fund. Currently, 8 school districts in Arkansas receive more than the minimum per-student funding amount from their 25-mill URT.

Beebe commented that even after a State Supreme Court ruling said districts can keep the excess collections on the URT, he believes the state should be able to receive that money.

“It's analogous to the state sales tax,” said Beebe. “It doesn't matter where it's collected. If more is collected in Little Rock, they don't get to keep the more. It all gets divided on a formula. That's as simple an analogy as I think you can come up with....It's called the Uniform Rate of Tax for a reason: It's uniform. It's a rate. And it's a tax.”

After both chambers adjourned for the day, Republican House Speaker Davy Carter said the insurance task force will have a wide ranging agenda.

“I think that task force will look at all of the state plans. It’s a real issue. You take that and you put on top of everything else that’s going on in the world with healthcare, It’s a big issue, [a] complex issue. There’s not easy answers,” said Carter.

Among the ideas floating around is a proposal by Democratic representative Jim Nickels to have all public employees, including public school staff, enroll in a single insurance program. That measure was tabled in the House Insurance and Commerce Committee for discussion during later sessions and consideration by the task force.