Governor Hutchinson: Highway Plan Dead Without Medicaid Expansion

Gov. Asa Hutchinson alongside state officials at a press conference Tuesday.
Credit Jacob Kauffman / KUAR News

Failure to pass his Arkansas Works program could lead to the cancellation of a planned special session for highways, Gov. Asa Hutchinson said Tuesday.

Hutchinson spoke the day before the Legislature enters its even-numbered-year fiscal session, where the signature issue will be Arkansas Works, his plan to continue the private option. That’s the government program where the state uses federal Medicaid dollars to purchase private health insurance for adults with incomes up to 138% of the federal poverty level. Created in 2013, the private option expires at the end of this year. As of the end of January, 267,590 Arkansans were eligible for coverage.

Legislators passed the policy by large margins last week but fell short of the three-fourths majority that will be needed for funding in the upcoming fiscal session, which begins April 13. At least nine of the 10 senators who voted against Arkansas Works have said they will not vote to fund the Department of Human Services’ Medical Services Division, which includes that program and others. That would be enough to block funding.

Hutchinson said his highway plan would use existing surplus funds as part of $45 million to $50 million needed to make Arkansas eligible for $200 million per year in federal highway money. The first installment is due Sept. 30. His proposal would apply $40 million in surplus and “rainy day” funds. Then on an ongoing basis, highways would be partially funded by 25% of unallocated surplus funds and a portion of general revenues raised from new and used car sales taxes.

Without funding for Arkansas Works, the money won’t be available, which would make a planned special session following the fiscal session unnecessary, he said.

“What we see at risk in the budget session with the debate on the funding of Arkansas Works is not just the budget constraints and cuts that we have to have as reflected in the alternative House budget, but it is also a cancellation of the special session for highways,” he said. “If Arkansas Works is not funded, that means there is no ability to utilize the surplus and take more money from general revenue to fund highways.”

Hutchinson said the only alternative would be to raise taxes, which he won’t do.

“The only plans I’ve seen are plans that include raising taxes, and I’m not going to put a tax increase as part of a highway plan on the call unless it can be shown that a majority of legislators support that, and I would be doubtful that a majority of legislators would support a tax increase,” he said.

Rep. Charlie Collins, R-Fayetteville, an Arkansas Works supporter, asked what would happen to the highway money if it doesn’t go to Arkansas. Hutchinson and Scott Bennett, director of the Arkansas Highway and Transportation Department, said the money would go into the federal Highway Trust Fund and be used by other states. Bennett afterward said that losing the federal funds would affect mostly system preservation projects.

“If you went through our program and looked at anything that wasn’t funded with the half-cent sales tax program or under the Interstate Rehabilitation Program, and it’s not strictly a bridge or a safety improvement project, those are all the projects that are at risk,” Bennett said.

Sen. Bryan King, R-Green Forest, a private option and Arkansas Works opponent, was not persuaded. Referring to Hutchinson, he wrote in a text, “What did he say: We aren’t getting rainbows and unicorns, and I-40 will be a dirt road?”

He said money should be taken from general revenue to help fund highways. However, he said the Department of Human Services, which would administer Arkansas Works, is rife with waste, and its funding should be kept separate from highways.

“They try and throw everything in to you expanding welfare to able-bodied working-age adults, where 100,000 of them don’t even work at all,” he said of the current private option population. “I mean, this guy is taking a playbook out of the Bernie Sanders-Hillary-Obama playbook in trying to use scare tactics and terrible stuff, where everything is not voted on on its merits or the issue.”

If Arkansas Works is not passed, Hutchinson said the state would have to look at an alternative budget like one released Monday by House leaders. That budget would cut spending in the foster care system by $10.9 million, spend $54.2 million more for the Department of Human Services, and spend $7.3 million less for the Public School Fund.

Nine of the 10 senators who voted against Arkansas Works have said they will not support the funding mechanisms. However, all 11 Senate Democrats voted for it. Sen. Bruce Maloch, D-Magnolia, indicated they are also resolute in their support of the program.

“I don’t think we’re going to pick out a specific agency or entity or college in any of the 10 districts of the senators that voted against it and try to kill their appropriation,” he said. “We’re not interested in doing that. But we will not vote for a DHS Medical Services appropriation without Arkansas Works.”