LITTLE ROCK — The incoming Republican leaders of the Arkansas House and Senate said Monday they favor using more of the state surplus and implementing none of the cuts in services Democratic Gov. Mike Beebe proposes to address a projected $139 million Medicaid shortfall.
Rep. Davy Carter, R-Cabot, who will serve as House speaker in the session that begins next Monday, and Sen. Michael Lamoureux, R-Russellville, the incoming Senate president pro tem, also said they believe it is not necessary to make a decision on whether to expand Medicaid during the regular session.
Tax cuts beyond the grocery tax reduction Beebe has proposed will be on the table during the session, they said in a meeting with the news media that was organized by the Associated Press Managing Editors.
Republicans will hold majorities in both chambers for the first time in nearly 140 years.
To resolve the Medicaid shortfall, Beebe has proposed using part of a projected $300 million state surplus along with instituting efficiency measures and reducing services, including cuts to adult dental services and nursing home care for patients who need limited help with daily functions.
Speaking to the same group later Monday, the governor said the proposed cuts to nursing homes were figured into the Department of Human Services budget as a possibility if Medicaid wasn’t expanded, but added he opposes those cuts.
"There are just some (cuts) we can’t do," Beebe said. "The most egregious to me is how in the heck can you throw those … nursing home folks out of nursing homes. You can’t do that. We’re not going to let that happen. I can’t sit here and tell you how we’re not going to let that happen, but that is my top priority in terms of where I don’t agree with the suggestions and recommendations that have come from Human Services."
Carter and Lamoureux both said they would prefer not to cut any Medicaid services and instead devote more surplus funds to Medicaid than the governor has proposed.
"I’m prepared to suggest using the surplus money, a combination of that with the growth money to avoid any of the cuts," Carter said.
Lamoureux said he knew of no legislators who support cutting Medicaid services, and he said in his opinion, "the cuts are not going to happen."
Beebe said he always has reservations about using one-time money for ongoing budget needs, noting that the money is traditionally used for capital improvement projects, repayment of prison bonds, emergency needs for agencies and his economic development fund.
"Can we do more? Of course you always can," he said. "But you make tradeoffs when you do that, you’ve got to make those judgments. Am I open to sitting down with the General Assembly and looking at that? Of course I am."
Both Lamoureux and Carter also said there is no hurry to decide whether to expand Medicaid under the federal Affordable Care Act to include people earning up to 138 percent of the federal poverty level, an expansion that Beebe supports. Some Republican legislators have floated the idea of postponing a decision to a special session.
"There is no rush. … It is so gravely important to the state that we’ve got to be comfortable in analyzing and knowing what we’re dealing with," Carter said.
Lamoureux acknowledged that holding a special session would cost taxpayer dollars but said, "the cost of Medicaid, the billions of dollars we spend on that, would in my mind trump (the cost of) being down here for a few weeks."
Beebe said he thinks lawmakers can address the Medicaid issue in the regular session.
The federal government would pay all of the cost of the expansion for the first three years, after which the state’s share of the cost would gradually increase to 10 percent. Carter and Lamoureux said they are not sold on the expansion even though the state would only bear a small portion of the cost.
"Ten percent of a big a number is still a dollar," Carter said "I mean, we still have to pay that."
One of the arguments that has been made for the expansion is that without it, Arkansans who earn less than 100 percent of the federal poverty level but are not currently eligible for Medicaid would receive no insurance subsidies, though they would still be required to have insurance. When asked Monday what would happen to that group without the expansion, Lamoureux said help may be available.
"We’ve heard presentations that say that that group could be eligible for a full federal subsidy … to buy health insurance for premiums as low as $29 a month," he said.
Lamoureux said later he heard about the subsidy from Arkansas Blue Cross and Blue Shield. A phone call to Blue Cross and Blue Shield seeking comment was not immediately returned Monday afternoon.
Spokespeople for DHS and the state Insurance Department said Monday they were not aware of any federal subsidy that would be available for people below 100 percent of the federal poverty line.
Carter and Lamoureux also said that despite the Medicaid crisis, tax cuts may be possible.
Beebe, who has successfully pushed to reduce the state sales tax on groceries from 6 percent to 1.5 percent during his tenure, has proposed cutting the food tax to eight-tenths of a percent per dollar if the state’s budget crunch eases. The GOP legislative leaders said Monday there may be room for other tax cuts this session.
"There’s a lot of members of the House that are focused on at least making themselves more knowledgeable on some type of income tax reform, and then I know that it tends to break down where the members of the Senate committee (on revenue and taxation) have looked more at some of what I’d call more pro-job or pro-growth type tax cuts," Lamoureux said.
The state sales taxes on manufacturers’ utilities and on replacement parts for factory equipment are among the taxes senators are considering cutting, he said.