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State Capitol Week in Review

State Capitol Week in Review

From Senator Larry Teague

May 6, 2016

LITTLE ROCK – With the successful completion of the fiscal session, Arkansas will fulfill its obligation to provide matching funds to go along with federal funding of Medicaid and other services.

Now, attention at the state Capitol will focus on a special session the governor wants to call to address highway maintenance and improvements. One of the main goals of a special session on highways would be to come up with state matching funds next fiscal year so that Arkansas can qualify for about $200 million a year in federal funding.

The state would need to provide about $46 million in matching funds this year and about $50 million annually in future years. The deadline for officially providing the matching funds is September 30, but the governor has said he wants to call a special session for late May to address highway funding issues.

The appropriations approved during the fiscal session include measures that authorize Arkansas to match federal funding for Medicaid and other programs within the Department of Human Services.

Much of the debate during legislative session centers around how to spend state general revenue, which will amount to about $5.3 billion next fiscal year. The general revenue fund is the state’s main discretionary spending account.

However, state general revenue is only a portion of all government spending within Arkansas. Federal matching funds support numerous services, such as highway maintenance and Medicaid. When federal funds are accounted for, about $20 billion is spent by the state every year. Federal funds come with strings attached, so if the state wants to make any substantive changes to Medicaid or welfare regulations, we must get approval from federal agencies.

For example, House Bill 1017 is the appropriation for the state Department of Workforce Services. Among numerous other duties, it administers the distributing of welfare benefits.

An amendment to HB 1017 that was adopted and passed in both chambers is intended to restrict how recipients can use their cash benefits. They could only use their cash withdrawals for food, clothing, utilities, medical needs, housing and other necessities. However, HB 1017 does not call for the restrictions to take effect immediately. Rather, the bill directs the Workforces Services Department to seek a waiver from the federal government allowing us to enforce the restrictions.

The legislature approved HB 1138 to appropriate $750,000 for computer upgrades in the Secretary of State’s office to make it easier to file campaign finance reports electronically. The bill sponsor said that in the 2017 regular session she intended to file legislation requiring all candidates to submit their financial reports electronically.

Tobacco Settlement Money

Arkansas recently received $49.6 million for this year’s share from the settlement of a lawsuit against major tobacco companies filed by numerous states. Arkansas was one of 46 states that sued for compensation for the cost of providing health care for people with chronic illnesses caused by smoking.

Arkansas spends the tobacco settlement revenue in health related programs and on anti-smoking initiatives.

The lawsuit was settled in 1998, and for the first several years the state received about $62 million. Arkansas will get money from tobacco companies for 25 years.

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