Lawmakers: path for passage of Arkansas Works exists, have concerns with Governor’s tax cut proposal

State Sen. Ron Caldwell, R-Wynne, and Rep. Vivian Flowers, D-Pine Bluff, both contend that a path for passage of Arkansas Works exists in this fiscal session, but both say their votes are dependent on how federal waivers will affect the program. The two Delta legislators also said they have stipulations before agreeing to any future tax cuts, such as the $180 million top income tax bracket reduction pushed by Gov. Asa Hutchinson.

Appearing on this week’s edition of Talk Business & Politics, Caldwell said that he is a ‘maybe’ on Arkansas Works, the always controversial Medicaid expansion program that requires a 75% vote from both chambers of the General Assembly. Caldwell did not vote for or against the Department of Human Services budget measure that contained Arkansas Works in the 2017 regular session, while Flowers did vote yes.

Flowers was asked if federal waiver requests could make Arkansas Works too conservative for her to support.

“I am a ‘yes’ vote for Arkansas Works for Arkansans. If this is tweaked in a way that makes it detrimental, then I’m not an automatic ‘yes’ vote,” Flowers said. “I would never think of making a vote that would take away that program altogether, and I think that Democrats, in general, certainly the Legislative Black Caucus, has been very vocal in our conversations with the governor about those waivers and been looking at ways to make sure that they don’t have a negative impact.”

She wants to avoid the work requirement for an Arkansas Works beneficiary taking paid work away from an existing business.

Caldwell shared Flowers’ view on making sure that Arkansas Works’ work requirements don’t harm private businesses. Caldwell also said that he and several other Republican senators who have not voted for the program in the past are undecided on their votes this session.

“We want some checks and balances,” he said. “I don’t think anyone in the Senate has ever publicly said that they were a ‘no’ vote… I’ve never said that I would not vote for it. I want to see the language. I’m like Representative Flowers, I want to see what they’re going to put out. I don’t want them to come in and say, ‘I want your vote,’ and then they go write the language in a manner that I would not be satisfied with.”

Caldwell added, “I’ve always been a ‘maybe.’ I want to see the language.”

The two lawmakers also expressed reservations about a potential tax cut suggested by Hutchinson in his State of the State address to the legislature on Monday (Feb. 12). He called for a reduction in the state’s top individual income tax rate from 6.9% to 6%, a potential $180 million revenue cut.

“I’m in support of all tax breaks that we can afford,” Caldwell said. “I think when we had the tax break on veterans’ retirement income that most people didn’t realize that we switched that tax burden to another group of people in Arkansas. It really wasn’t a tax break. If we had found that money in a state agency to reduce spending somewhere and reduce the spending and give that tax break to the veterans, that’s what we should do. I voted for the tax, but in reality to fund that veterans’ tax break we raised income taxes on people drawing unemployment checks.”

Flowers said there are many state funding priorities that have to be met before she could support more tax cuts.

“I think we all would like to see tax cuts and tax relief when we can afford it, and I would say that we can’t afford anything when our basic needs aren’t met and when you look at every socioeconomic indicator for Arkansas and we’re at the bottom,” she said. “So, when we don’t fully fund pre-K, after school [programs] in summer, when we still have great needs as it relates to our highways, which is being felt by counties all over the state, municipalities who also in the last couple of sessions have lost revenue, I just, I don’t think that that is the best way to outline our priority.”

With pharmacists complaining about lower reimbursement rates that occurred in Blue Cross and Ambetter state health insurance exchange plans handled by pharmacy benefits manager (PBM) and pharmacy chain CVS Caremark since the first of January, Caldwell and Flowers are pushing for more state regulation of PBMs.

Caldwell has filed a bill in the fiscal session that will require a two-thirds vote of both chambers to consider. Late Friday, legislative leaders asked the governor to consider a special session after the fiscal session to avoid dealing with the PBM issue during the month-long budget session.

Caldwell said a meeting with CVS Caremark is scheduled for Tuesday to try to fashion a private marketplace solution.

“we’re meeting Tuesday with CVS Caremark. They asked for the meeting, you know. They want a seat at the table and we granted that, and they’re coming in to tell what their alternatives may be and we’ll listen to that,” he said.

One option may be to return to reimbursement rates that were in place before January 1, 2018. Caldwell says they may have to go further.

“Why not go back three years ago when we passed a law, when the law said then that they cannot charge themselves a different rate than what they charge independent pharmacies?” he said.

Flowers said it is time for PBMs to be more fully regulated by the state regardless of the outcome of Tuesday’s meeting. She sees a short-term and long-term discussion on regulation on the horizon.

“Short-term and long-term fixes are not mutually exclusive, and I think we need to do all of it in the best interest of our pharmacists who provide a service, an important service, to people in the context of healthcare in general,” she said.

You can watch more of Flowers’ and Caldwell’s full interview in the video below.

Talk Business and Politics airs on KASU 91.9 FM on Mondays and Fridays during NPR’s Morning Edition at 6:51 am.  It also airs during NPR’s All Things Considered on Wednesdays at 5:20 pm.  You can follow more of their coverage on their website TalkBusiness.net where you can also catch the latest Northeast Arkansas news.