Gov. Asa Hutchinson has pulled off a promised middle-income tax cut and kept intact Arkansas' private option insurance plan.
That's a strong start for the new governor, who gets the lion's share of the credit despite the fact he didn't have a vote on either issue.
Governors never do.
The state Legislature actually voted to cut taxes for those middle-income taxpayers and agreed to keep the compromise plan that has allowed the state to get federal Medicaid dollars for more qualifying Arkansans for the past two years.
What Gov. Hutchinson contributed was leadership.
He probably didn't have to do a lot of coaxing to get enthusiastic tax-cutting Republicans, who control both houses of the Legislature, to help a Republican governor fulfill his campaign promise to cut taxes.
Truth be told, lawmakers of both Republican and Democratic stripes can usually be persuaded to vote for tax cuts. That's popular with voters back home -- wherever home is and whatever their political leanings.
In fact, when it was a done deal, almost all of the lawmakers wanted to be counted for it. The final version of the bill passed with only two "no" votes in the entire Legislature.
As a result, close to 600,000 of the lawmakers' taxpaying constituents will see a 1 percent cut in their state income taxes, starting in the 2016 tax year.
The tax rate will drop from 6 percent to 5 percent for taxpayers earning $21,000 to $35,099 and from 7 percent to 6 percent for those earning $35,100 to $75,000.
The cuts will cost the state $102 million in revenue.
Notably, Hutchinson signed the tax cut into law just 24 days after he was sworn into office.
He had campaigned on the theme that a middle-class tax cut was the place to start to give tax relief and to boost the economy, making the state more competitive with surrounding states to attract industry and create jobs for Arkansans.
The governor said he eventually wants to lower the rate for other income categories, when resulting revenue growth allows.
For the record, the legislation also repealed part of an exemption on capital gains that the Legislature approved in 2013. The governor had proposed a larger rollback of the capital gains tax cut, but lawmakers weren't ready to take back the full exemption.
Some even want to try to restore the full exemption later this session, which would have consequences for the balanced budget Hutchinson has proposed.
The governor's more challenging and more impressive accomplishment was winning relatively easy support for extending the private option.
Reauthorization, which required a three-quarters vote in both Houses of the Legislature, even passed on the first try with votes to spare in each chamber.
Candidate Hutchinson had kept his cards close to his vest on the controversial issue. The strategy set Gov. Hutchinson up to keep the plan in play.
Without the federal dollars for Medicaid expansion, the administration would have had to cut more deeply than planned in state spending to cover his tax cut.
So, the question wasn't so much whether he would propose to extend the private option. The question was instead whether he could get other men and women who were elected on the promise of killing it, to turn around and support the plan -- even temporarily.
He did persuade them, mostly because he also promised reform in the state's Medicaid system. We'll learn later what else the governor bargained to get those votes.
Certainly, a large part of the reform will be about finding a different path for insuring the 223,000-plus Arkansans who benefit now from the state's unique private option.
Lawmakers approved Hutchinson's proposal to create a task force made up mostly of legislators to find that path and other ways to improve health care delivery and cut costs.
The task force must make its recommendations by the end of the year. The private option has only been reauthorized through June 30, 2016.
Again, these two big issues -- the tax cut and the private option (or more specifically the federal money that backs it) -- are interrelated because both significantly impact the state's budget.
That reality won't go away. The task force may even have to come back with something similar.
Whatever the task force might offer will almost certainly be nicknamed something other than "private option."
The suggestion already floating out there is "Asacare," which could morph into something people love or hate, much like Obamacare -- the root of Arkansas' private option -- has.
Brenda Blagg is a longtime Northwest Arkansas journalist, a freelance columnist and a member of the Arkansas Freedom of Information Coalition. E-mail comments or questions to [email protected].
Commentary on 02/11/2015