And hello again, everyone, and thanks for joining us for the broadcast for Arkansas Week.

General Assembly returns to the state capitol next week.

For its biannual fiscal session, its mission almost exclusively budgetary.

At least that's what the Arkansas Constitution anticipates.

Be assured the April meeting quite likely will not be the only time this year the legislature gathers as we are about to hear.

In a moment, we'll speak with the leader of House Democrats about what's in store the next few days and beyond.

First, the speaker, Republican Brian Evans of Cabinet.

Mr.

speaker, thank you for joining us.

And welcome back.

You're always welcome here.

Thank you Steve.

No surprises in the next few days.

None whatsoever.

We have spent a great deal of time planning out the fiscal session, working with, House leadership, Senate leadership, our budget chairs, the governor's office, her budget team.

And we believe we're ready to get in and take care of the state's business and to the general revenue budget.

The governor's proposing a let's call it 3%.

Yes, sir.

Yes, sir.

Flat three.

Reasonable, reasonable to you.

That's very reasonable.

And, Norm, it's very normal for us to have a 2 to 3% increase.

Well, in the manner of, of budgetary procedure, are you a little concerned that the budget is pretty tight?

We've got a surplus right now.

And even as we tape this broadcast on the Thursday, you got a pretty good revenue report in terms of expectations and surplus.

Arkansas is very blessed right now.

We we are positioned very fiscally strong.

If you look at our reserves, we have upward close to $3 billion in catastrophic and restricted reserves sitting there.

We also are seeing our revenues continually uptick.

And I think that just has a lot to do with the work that we have been able to do over the last several years to make Arkansas a very attractive state for people to move to and, and, put down roots and do business with, anticipating then no snags whatsoever in, in the regular or the, the regular, the fiscal session.

Anyway, it's anticipated that the governor will summon you, ladies and gentlemen, back in just a few days for a special session.

Tax cuts, possibly.

Possibly prison.

Let's start with tax policy.

Tax policy will be what, will be put on the special, the call for the special session.

We have been working exclusively planning for that.

And we're anticipating being able to do a somewhere between a two point or five point reduction in that state income tax rate.

We know that, we don't live in a vacuum in Arkansas.

We know that our surrounding states continue to do what, we have been doing even back in the previous administration.

And that's taking very responsible chunks out of that state income tax rate.

That makes us very attractive for people to want to be here.

Yeah.

The governor says that she her anticipation that is by the end of her term it will disappear.

The income tax will disappear.

Feasible?

I think that it is feasible, going to a pathway to zero.

I believe that there is a way to achieve that.

But we have been very purposeful in the reductions that we have made over the last several years, taking incremental chunks at that and just making sure that we're being very fiscally responsible for, for our state.

Well, the income tax is a huge source of revenue.

It's income and sales tax.

That's where the money is anyway.

Can you sustain that path?

Well into the future?

I believe we can, I think once we get to 3%, over the next few sessions, I think at that point we'll, we'll be able to really see where we are, how our reserves continue to look, how we're doing on our bond ratings, how we're doing on our revenues, to where we could move forward to zero.

Well, she has her agenda, her timeline, I should say the House and Senate may have theirs.

You fairly close in tune.

Very close.

Yes, sir.

And in terms of of getting to that 3% or even beyond that, I think, when when you look at, the House in the Senate as a whole, we all are striving towards getting to zero.

All right.

The governor is, well, one of the things you're going to be asked to do is increase the amount of money that goes into the loans, act into the voucher program.

Do you and your your counterpart, I think, in the Senate just said a couple of days ago, we're not going to cap this thing as opposed to any capital.

Is that prudent?

I think that is that that what we have done is we have listened to our members, and we have gone to the administration and asked for some benchmarks to be put in place, some measuring sticks to be put in place.

And they're doing that through the rule process.

There have been some additional rules that have been submitted and put out for public comment.

That's just going to put some, some barriers, some limits on transactions.

We're going to take that as a first step.

I think the governor was very, forward thinking, when the Loans Act was introduced, that we knew once it was fully implemented, we would have to go back and take a look at that and see if tweaks needed to be made.

I think that's where we are now.

I appreciate them listening to us, and we'll see what that rulemaking process does.

Well.

Can you follow up on that, Mr.

Speaker?

What what sort of guidelines, what sort of rails are you going to impose are likely to be imposed?

Certainly.

So, we have already made strides in in looking at what, what amount of the education freedom account can be spent on extracurricular.

The limits that are put on place for the purchase of technology, the limits that can be put on place as far as rollover.

And so we're only going to allow, recipients of the education freedom accounts to be able to rollover a certain amount from year to year so that those balances don't continue to increase, therefore limiting the need that they would have the following year.

Some of the expenditures reported so far under the Learning Act were by individual households, drew quite a bit of attention.

They have some skepticism.

It has.

And so that's also part of that process is is putting, a broader, group together to be able to audit those expenses, to be able to reject those expenses, to better define what expenses would be allowed.

And but also, making sure that we are creating the right path for students.

If those expenses, that have been challenged, are accurate, there's an appeal process that parents would be able to go through.

And still there is some concern among some of your members, even GOP members, members of your conference and small school superintendents as well, about the trajectory of this program and its impact on K-12 public schools.

Well, I think your message to them that my message to them is, if you look back at what we have done as a general assembly, over the last four terms, we have put more money into K-12 public education through the adequacy process than in the history of the Lakeview case.

We have continued to follow that.

We are equally committed to providing funding for our public schools as we are through the Learning Act, to the private, to the homeschool, to the micro schools.

And so, to say that we're not, putting that equal amount in there, that's just not the case.

Okay.

One thing the major administration objective has been, of course, the prison which was proposed for Franklin County still on the table, evidently, but obviously not in this budget.

So this is do you anticipate that coming up in a special session, or is it going to be a cooling off period?

I think, that we certainly want don't want to take that off the table.

We have a governmental responsibility to provide for the safety of Arkansans.

Right now, we have 2600 state inmates that are sitting in county lockup, and that's not sustainable.

To me, that's not acceptable.

We have to have an expansion.

We also have close to, six digit number of, known felons that are walking across the highways in the streets of Arkansas.

That's not acceptable.

We have to do better than that to protect Arkansas citizens.

What that solution is, I'm not sure.

So is it off of the table?

No.

But I think under the current plan that has been provided, Senator Hastert said he doesn't have the votes.

If you could whisper in the governor's ear about the share with us what you would whisper to the governor's ear about the prison project, that location, that amount of money, that size one?

Well, I'm not an expert in corrections, and and she has hired the people that are they have given her guidance that that is the perfect location based upon the criteria they have in their expertise for success.

However, if that's not the right location, then we need to go find the location that he is.

And I believe that, there are communities across the state that are welcoming.

It's just a matter if they can provide the workforce, the infrastructure, the utilities and the services that we would need to operate the corrections facility properly.

You mentioned the 2600 inmate back up in Kansas City and county or mostly in county jails.

Mr.

speaker, are we doing something wrong?

Arkansas has an exceptionally high incarceration rate, and that's been noted by many officials in and out of state.

I don't believe we're doing anything wrong.

I'm just not sure that we're doing enough.

And so our colleagues have worked together across the aisle, to put an emphasis on recidivism and what we can do as far as mental health therapy, workforce training, on those that are incarcerated, get them, the therapy that they need, get them, back out on, in the communities, get them in the workforce and help them be productive citizens.

An issue that has not been a front page issue in some time now.

And that's Medicaid.

Under new federal rules, it would appear that we are told that many, perhaps in Arkansas, many tens of thousands of individuals could lose Medicaid coverage, putting new pressure on those rural hospitals.

Your thoughts on that?

The Rural Health Transformation program that we have been awarded a large, piece of is going to be a big difference maker in what we can provide for rural health.

Medicaid, is a big ticket item for our budget and will continue to grow, unless we're able to make some generational changes in our rural communities.

And I believe through the Rural Health Transformation program, we're going to have the opportunity to do that quickly.

Well, nothing seems to happen quick because we are talking about a generational change, but everything that we can do is going to give us an opportunity to improve that.

And I see a lot of great work ahead.

It's a five year plan.

I expect to see great results from that.

And there's this one, sir.

There would appear to be a significant move on the part of us trustees, and we we're talking about higher ed now and higher education spending that they want some academic money moved over to the athletic side.

Give us your sense of that.

And if you're if you have a sense of what your members think about that from a policy standpoint, from a policy standpoint, what our members are most concerned of is the fact that we are providing an atmosphere where every student in the state of Arkansas can get a higher education degree and can do that, at the, at the, greatest amount of ease to their family, household budgets.

And so the thought of increasing the cost of a student, to go to college, specifically at the University of Arkansas, bearing the cost for programs outside of their academia, is hard for a lot of our members to swallow.

However, we have a board of trustees, a chancellor and assistant president that have been looking at this for months.

I believe that they have reached somewhat of a compromise.

It doesn't fully reach the end goal, but right now, there's no cost that's going to be passed on to students.

And I believe as long as they can continue that pathway, we're going to provide a great opportunity for the students of Arkansas.

Yes, sir.

If there is no cost immediately to students and and households, that's that's for now in this in, ell era and college athletics, can that hold?

I think as long as we keep our priorities in order, that will hold, Mr.

Speaker.

Thanks.

Sure.

We'll leave it there.

So I know you're always welcome.

Come back soon.

Thank you.

Steve, as always, a pleasure.

All right.

Thanks.

Yes, sir.

And we'll be right back.

And we are back.

A different perspective now from the loyal opposition.

We're joined by Representative Andrew Collins, Democrat of Little Rock, the House minority leader.

Mr.

Collins.

Thanks for coming aboard, as always.

The speaker, there are no indications that there will be any surprises during the session that starts next week.

Do you see any.

Well, that's what surprises are, right?

There are things you don't expect, and I don't know if there will be or not.

I do think there will be some efforts to address some issues that are really important to people, percolating up in communities around affordability, around childcare, health care, possibly this, very station.

And I do think that, we'll have serious conversations whether those things will proceed all the way.

I don't know, but, there's a lot to talk about.

Well, we'll start with the big ticket, and that would have or at least been programmatic terms from, from the administration standpoint.

And that's the voucher program, several million dollars added to that program now.

And some concern among some legislators and some educators about the trajectory of it.

Yeah.

You know, I think that when I think about what people are really talking about and really care about right now in Arkansas, it is rising costs.

It's gas being so expensive, it's health care, it's childcare not being available.

There is some things that have happened recently, nationally and locally.

And this budget, the biggest new spending item by a long shot is vouchers.

We're putting $122 million in, plus another 70.

That's a total of about $379 million.

That's a lot of money.

That's a, in my opinion, something that is going to be difficult to check later because once people start getting a benefit, they typically don't want to give it up.

And ultimately it undermines what we're doing with public education.

I just think this is something that is it's not transparent, it's not very well monitored.

It's ripe for abuse.

And, it seems to be the priority at a time when we should have many other priorities dealing more with people's needs out in the state.

Well, the speaker has indicated that.

Yes.

And in fact, a review of the expenditure process is under way, is called for and is underway, and that the guidance that will be provided, perhaps in this session or administratively speaking, ought to do the job.

You concur?

I don't think it will.

So for one thing, we don't have a cap on this program.

It could conceivably go up.

And in fact, the president pro tem mentioned the other day, if it's a $100 million a year every year, that's fine with him.

It's not fine with me because this is a black hole that we are potentially committing ourselves to while having the needs to educate all children.

Looking back, he backed away from that just a little bit and I would go ahead.

That's what he said.

But, you know, we still have a constitutional obligation to educate students in a system of public education so that need doesn't go away.

But what we are doing is taking students out of that system with this voucher program, which reduces the funding to public schools.

And that is one of the big reasons that this is such a difficult policy choice and in my opinion, the wrong policy choice, especially to keep funding it when we do have budget limitations in this.

Well, we but we advocate for the program.

Note that we continue to put into minimum foundation aid ever increasing amounts of money.

Well, that's for now.

But when you well, for a public program.

Right okay.

So there is inflation.

So you need to keep up with inflation for one thing.

But as students continue to leave the public school system, the funding that will be going to these districts will be dropping because it's per pupil.

And so you're going to see schools having to close consolidate.

You're going to see people leave the system.

It's just what's been happening because you're getting 90% of the foundation funding.

And if you're going to a home school or a micro school, there's very little check on what that money is being spent on you, in terms of new expenditures or expenditures, family friendly programs that you mentioned, childcare, for example, and others, those are what can the state do?

So they can do quite a lot.

So for one thing, we've introduced bills.

I say we a House Democrats introduced bills, but others Republicans did too.

We were told last session very little in new spending would be able to go forward to save money for this voucher program.

That's that's the priority here, okay.

It's vouchers.

It's not many things that would be beneficial important for people in the state.

That's one.

Number two, we're holding a lot of budgets flat.

As I mentioned.

Almost certainly the majority of the new money is going to vouchers.

In the meantime, we're holding budgets flat sometimes for a decade in really key areas, areas that impact whether or not you can get health care, whether or not your hospital stays open, whether or not you have a child care facility you can go to, and whether or not you have to pay a copay for the first time.

In many cases, for some of these families who were low income.

So this directly impacts people's bottom line when we are putting those priorities aside in favor of vouchers for private and home schools, there is, it's just a given that there will be a special legislative session.

And that's evidently at the top of the administration.

Part of it is, is tax policy or a tax reduction.

The governor has indicated I want it down to nothing.

Speaker's indicated, well, more 3% or we're moving in that direction anyway.

Are we moving a is that good policy?

B are we moving too fast?

I think it's simply got plenty of money right now.

Well, we we be talking about a huge percentage of our budget as a state.

If we were to go to zero income tax, I don't think that is realistic.

And I don't think it's wise either.

We would be increasing taxes elsewhere or we would be cutting essential services or both.

There's just no way to square that circle.

There are a handful of states that have zero income tax in almost all cases.

They have other revenue sources that make up for it.

Texas is the example often, given they have oil and gas reserves that they tax, that we don't have Alaska being another, we might be able to get there.

But if we do get there, it's going to be on the backs of working people who are going to see higher tax burdens elsewhere.

If it's property tax, sales tax, whatever, I don't think it's a good idea and I don't think it's realistic.

I actually don't think in this administration we will see it.

I would be shocked if we ever see it in Arkansas.

Is there room for tax relief in your estimation of another sort?

There is.

I wish we would see a different sort of tax relief.

And then what we're probably going to see, which is going to be a cut in the rate for top earners, because ultimately that is a tax cut for millionaires, billionaires too.

Now it's it is broader base because we have such a flat income tax structure.

But what I would like to see is more targeted relief to working class, middle class Arkansas families.

They're the folks who really could benefit from a little more money in their pocket.

Millionaires and billionaires don't need a tax cut right now.

That is who is going to be getting the lion's share.

This effectively, we are shifting the tax burden more onto working families when we do these kind of broad based tax cuts, that is well known by now.

There's no mention of the of the prison project, certainly in this session, the administration apparently is backing off for at least a little while.

A special session may be possible.

Your thoughts on that?

Well, I don't think they have the votes for it, and I think for good reason.

You know, this project has been controversial from the beginning because of the location, because of the size, because there's not a workforce in that area to support it, because the people out in Franklin County don't support it.

Even the Board of Corrections members who were supposed to be dealing with this sort of policy issue, as opposed to the governor's office, have many other ideas they've proposed as alternatives, and those have been dismissed.

I think there are alternatives that might relieve our prison overcrowding problem.

I don't think this is a particularly viable alternative right now.

We'll see where it goes.

But is any prison salable?

Well, I think politically and in the house, I think so.

I think maybe not a 3000 bed prison in a parched, you know, part of the state where they don't want it.

But I do think that we probably have some room for changes in how we have our prison population distributed.

Nobody likes the idea that we have state prisoners at county jails, you know, throughout the state.

We do have that issue.

We do need to relieve that somehow.

We could do that in a different way.

That would be salable.

I think if there's any interest in this administration in, changing course on that.

Okay.

In terms of the administration's relationship with the general Assembly, it has been it's strained at times.

It would appear, even sometimes with the with the Republican leadership.

Has that shifted in any way that you can tell?

Well, I think it's always situational.

And I think it depends on the member.

I think she works perfectly well with some people on some issues.

And there are certainly issues where, either her or the staff, the administration, they do.

But that's, that's natural.

And I think that's normal.

But, you know, at the end of the day, that is the governor and we that's the government we have.

Right.

And so I think we will work with the governor where we can, speaking from my standpoint as the loyal opposition, as you mentioned, we will often not agree, but where there is room for collaboration and we're working together, we're also open to that.

And a couple of things that we've discussed with the speaker just a minute ago.

And one of them is Medicaid under new rules that would there is the concern that a great many Arkansans who are now Medicare or Medicaid beneficiaries could lose their coverage, and that would stress the system in ways that would, would really damage rural health care, particularly rural hospitals.

Your thoughts?

Yeah, that's happening right now.

I mean, so I think that has been going on to an extent.

We saw the enhanced premium subsidies from the ACA, extend it out by, during the coronavirus pandemic, those expired.

So you're going to see people not be able to afford their health care as much after that.

And then you're going to see changes from the big beautiful bill come in and you're going to see the work requirements put on, which, as we know from before, don't necessarily induce people to work because it ends up just throwing people off their health insurance.

And that is very clearly what's going to happen in many cases.

Hopefully some will work.

Nothing wrong with that.

We love the idea of people getting to work, but often what's going to really happen is they don't have health care.

Hospitals will either shut down specific specialties, or they might shut down altogether because they have to make a living too.

And the whole system is interrelated.

So even if you're not a medicaid recipient, you're going to be impacted by the cuts to Medicaid that are underway.

Well, you know, it should.

The General Assembly be prepared to do something about that?

And what absolutely we should.

We can't control what happens out of Washington, but we can't control what we do here in the state.

And I think keeping key DHS budgets flat, to be frank with you, is a recipe for disaster.

We have inflationary costs.

We have more of a burden coming on to the state if we don't step up and do what we need to do to make sure our human development centers are adequately funded, if we don't make sure that our, providers are getting adequately reimbursed, we're setting our whole system up for disaster.

And I think that, you know, again, it impacts rural Arkansas, but that has a trickle effect into urban Arkansas, too.

That's more strain on these hospital systems and, in urban areas, too.

Okay.

And then in terms of higher education policy, through both, both, funding and academic policies, anyway, is the General Assembly asserting itself?

Is it over asserting itself in terms of academic policy hiring, for example, specifically, yes, and not all.

By the way, this is not an act of the General Assembly necessarily, but individual legislators have asserted themselves.

And I think the real problem is when the universities listen and act accordingly, because individual legislators can do what they want and say what they want, but it only has any impact if the university changes decisions.

And I'll tell you specifically, the dean of the University of Arkansas Law School being UN hired after legislative pressure was a terrible thing for the university and a terrible thing for the state, because they hold the cards they get to hire, they don't have to bow to the whims of a single legislator.

And would we cut the entire funding?

I yeah, I really doubt that we would actually go through with that threat and cut off our nose to spite our face.

And so I think the they need to recognize that if they do this, if they go down this road of acquiescing to these demands, it's just going to get worse.

And I hope that that is the one off and we are done and we move on, with these, universities having a little bit more independence and acting accordingly.

And just a few seconds remaining, should academic moneys be moved to athletic, say, at Fayetteville, that's where it's it's not my business.

I leave that to the university administrators in the board, but it's going to fall back on the General Assembly eventually, will it not in terms of its affordability, if it does, we will deal with that.

But I again, that is micromanaging a university.

I'm not interested in doing that.

Andrew Collins, Minority Leader in the House, thanks very much for coming in.

Thank you.

And come back soon.

And that does it for us for this week.

As always, we thank you for watching and we'll see you next time.