LITTLE ROCK — Gov. Mike Beebe took the oath of office Tuesday for his second four-year term and called for the Legislature to cut the grocery tax, change funding for colleges to promote graduation, restructure Medicaid and rework sentencing laws to slow the growth of the state’s prison population.
In his speech before a joint session of the House and Senate on the second day of the 88th General Assembly, Beebe told legislators he appreciated working with them cooperatively in previous sessions, and he asked that their “partnership remain steady” as they negotiate state budgets.
“Unless we take action, both our Medicaid costs and prison populations are increasingly propelling us toward the unpalatable choice of raising taxes or cutting services,” Beebe said.
A Democrat, Beebe was first elected governor in 2006 and was re-elected in November. A state senator for 20 years from Searcy,Beebe, now 64, served as attorney general for four years before becoming governor.
He’s had rapport with legislators the past four years and was able to persuade them to support most of his legislative agenda. But there are more Republicans in the Legislature this year, so it’s unclear whether Beebe’s successes at the Capitol will continue.
He repeated his call fornot cutting any taxes beyond the grocery tax. Republican legislators have proposed nearly a dozen other tax cuts.
“He’s certainly good about making his opinion known, and it’s a very respected opinion,” said House Republican Leader John Burris of Harrison. “He’s been doing this for [three] decades. We always look to work together. I think we agree on a lot of things. [Beebe’s] main points were right. If we’re going to cut taxes, we have to be prepared to pay for it.”
Beebe’s 25-minute speech didn’t contain any big-ticket legislative priorities he hasn’t already talked about, but he provided a little more detail.
“Our woefully low rates of degree completion must change if we are to truly claim education success,” Beebe said. “I want to tie funding for higher education more closely to completion and graduation rates, not simply for enrollment. These tax dollars must produce college graduates.”
He called for doubling the number of college graduates in Arkansas by 2025, which he called a “lofty goal.”
Beebe told reporters later that his plan is to gradually tie state funding to enrollment at the end of the semester, rather than to enrollment at the beginning.
Beebe’s proposed budget calls for a 1 percent increase in funding for higher-education institutions from $725 million to $733 million.
Regarding tax cuts, the governor reiterated his plan for cutting the state sales tax on groceries by one-half of a percentage point, which would reduce state revenue by $20.8 million a year.
“This is not much, and I would like to do more,” Beebe said. “But it is the most broad based tax relief we can offer our citizens at this time. It shows our continued commitment to eliminating this regressive tax.”
Since Beebe was elected governor, the grocery tax has been reduced from 6 percent to 2 percent.
“Beyond that, I don’t see any additional room for tax cuts or significant increases in program funding,” Beebe said. “If you call for a tax cut, it’s only fair that you state which existing programs you will cut. To pass changes without regard to consequences sidesteps our responsibility as leaders.”
Sen. Gilbert Baker, R-Conway, co-chairman of the Joint Budget Committee, said he didn’t think legislators with tax-cut bills should have to provide areas where government would be cut.
“There is a whole budget process that we have to go through,” Baker said. “As the budget committee, we will make those decisions detailed to the penny.”
Baker said he supports the governor’s public-school funding plan, which provide a $55.1 million increase for the Public School Fund (to $1.86billion).
Beebe touted a recent ranking by Education Week that puts Arkansas sixth in the country in education policy and performance.
“It does not signal an end to our work,” Beebe said.
He said he wanted to make sure that money meant to help low-achieving students is used by schools districts for its intended purpose.
The state Medicaid budget of state and federal funds combined is $4.5 billion for fiscal 2011 and is projected to increase to $5.1 billion in fiscal 2012.
Beebe said there are “no quick solutions.” He’s talked about changing the “fee for service” billing system into one that “rewards results” of treatments required for a diagnosis of an illness. He said he wants to set up pilot programs to try that idea.
He also wants to tap more federal Medicaid dollars by asking providers of Medicaid services for “self-imposed taxes.” These could be used to obtain extra federal dollars. The state made a similar use of a “bed tax” on nursing homes approved in 2001.
Further, the governor wants to create an electronic health-record system so Medicaid providers know what services have already been provided before they are provided again.
State Department of Human Services spokesman Julie Munsell said federal money might be available for that system.
Regarding prisons, Beebe said the state would need to spend another $1.1 billion over the next decade to keep up with the growing prison population, which is now about 16,000 including inmates who are in local jails awaiting space in state prisons.
“The steps we take in correction reform will be rooted in common sense, with input from those who know the criminal justice system best and always be undertaken with public safety foremost in our minds,” Beebe said.
He called for reducing sentences for some nonviolent offenses by allowing them to be on probation and be productive members of society.
Beebe said sentencing guidelines approved by legislators are “often manipulated” by some judges who give longer sentences.
“Those guidelines must be more closely followed,” Beebe said. “Perhaps those jurisdictions that frequently exceed the grid should share in the cost of incarceration.”
Beebe said he didn’t have a specific proposal in this regard but was “throwing it out there to see if it will stick.”
He’s proposed increasing the budget of the Department of Community Correction by 6 percent to $72.4 million, allowing the department to hire 41 probation and parole officers, restoring positions that were frozen because of budget cuts, and to add staff members at minimum-security lockups for nonviolent offenders.
Beebe has said he has no proposal for additional money for highways. He addressed the subject briefly, calling House Speaker Robert S. Moore Jr., D-Arkansas City, a “tough man willing to lead that discussion.” The governor repeated that he’s opposed to shifting general revenue toward highways.
Arkansas Chief Justice Jim Hannah, a former law partner of Beebe’s, administered the oath of office to the governor.
In the House chamber as a guest was former state Rep. Jim Keet, R-Little Rock, who lost to Beebe in the governor’s race last year. Keet said he wanted to see the event. Keet served in the Senate with Beebe.
The number of Republicans increased from eight to 15 in the 35-seat Senate and from 28 to 44 in the 100-seat House of Representatives.
Rep. David Sanders, R-Little Rock, said he thinks there is more financial leeway than the governor indicated.
“We have members that have already filed bills for tax cuts, and I think we'll have the debate, and we’ll, in fact, see if there is more room in the budget,” Sanders said.
Rep. Ed Garner, R-Maumelle, said he’ll push for a cut in the capital gains tax without the governor’s support. He said extra money could be found by eliminating government waste, but he did not have specific examples.
“I still counter there's plenty of room to find room to make tax cuts that would create jobs and we have to do that immediately,” Garner said.
Sen. Johnny Key, R-Mountain Home, said he believes that governor’s relationship with the Senate Republicans “will be fine” and said the perception is that there are going to be partisanship problems in the House.
“But until we get into the session and see what issues come to the front, it is hard to say what is going to be partisan differences and what is just going to be the old ruralurban differences,” Key said.
Beebe told reporters that so far there hasn’t been much partisan activity.
“I don’t think you need to build this into a partisan thing,” Beebe said.
But he added that it is possible legislative actions could become partisan as the session goes on.
Sen. Linda Chesterfield, D-Little Rock, called Beebe’s speech “an inspiring message but also a reality check.”
Also being sworn in Tuesday were new Republican officeholders Lt. Gov. Mark Darr, Secretary of State Mark Martin, and Land Commissioner John Thurston. Three Democrats were sworn in: Attorney General Dustin McDaniel and Treasurer Martha Shoffner to second terms and former Secretary of State Charlie Daniels as auditor.
Darr, presiding over the Senate for the first time, said he would pray for senators once a day by name.
“If that offends you, please let me know and I’ll pray for you twice,” Darr said. Senators laughed.
In other business, the Senate approved Senate Bill 1 by the Senate Efficiency Committee to appropriate $1.35 million for the Senate's expenses for the 88th General Assembly through June 30, 2011. Sen. Randy Laverty, D-Jasper, said the Senate approved the same amount for the session that was held two years ago.
Information for this article was contributed by Sarah D. Wire and Michael R. Wickline of the Arkansas Democrat-Gazette.
Calendar This is the calendar of public events of the 88th General Assembly for today, the third day of the 2011 legislative session.
JOINT
9 a.m., Budget Committee, Room A, Multiagency Complex.
HOUSE
10 a.m., Agriculture, Forestry and Economic Development Committee, Room 138.
10 a.m., State Agencies and Governmental Affairs Committee, Room 151.
10 a.m., Aging, Children and Youth, Legislative & Military Affairs Committee, Room 130.
1:30 p.m., the House convenes.
SENATE
10 a.m., Revenue and Taxation Committee, Old Supreme Court Room.
10 a.m., Education Committee, Room 207.
10 a.m., Public Health, Welfare and Labor Committee, Room 272.
1:30 p.m., the Senate convenes.
Front Section, Pages 1 on 01/12/2011