LITTLE ROCK — With a vow to set aside money for tax cuts and a call for colleges to halt tuition increases, Arkansas Gov. Asa Hutchinson’s $5.6 billion budget proposal is a preview of the campaign message he’ll offer as he seeks a second term. The reaction is also a glimpse at the pushback he’ll face from Democrats and some fellow Republicans in his re-election bid.
Hutchinson’s proposing a nearly $173 million increase in state spending in the coming fiscal year, about a 3 percent increase. But the governor is touting the figure as $100 million less than what he proposed nearly a year ago and pointing to drops in the state’s Medicaid enrollment over the past year.
“This budget is conservative in spending, increases our savings and invests in the future,” Hutchinson told lawmakers last week.
Hutchinson’s budget proposal comes out at the cusp of a re-election campaign that’s barely under way. Hot Springs gun range owner Jan Morgan announced on New Year’s Eve she’d challenge the incumbent governor from the right in the GOP primary. Jared Henderson, the former head of an education nonprofit group, is the only Democrat mounting a longshot bid against Hutchinson.
The budget plan includes a proposal that appears aimed at winning over conservatives. Hutchinson proposed $48 million of the state’s projected $64 million surplus for a reserve fund that could set the stage for another round of tax cuts when the Legislature meets for its regular session next year. The governor hasn’t proposed a specific tax cut if he wins re-election, and a legislative task force is supposed to issue its recommendations for tax changes this fall.
Hutchinson’s request that the state’s four year colleges and universities freeze tuition for in-state students appeals to a broader swath of voters, and is likely to come back up in the campaign if any of the schools agree. Hutchison cited a $10 million funding increase schools are receiving through a new “performance-based” funding model.
“It’s time to give our students a break,” he said.
The biggest unknown for next month’s fiscal session is whether Hutchinson can again win support in the Legislature for keeping the state’s hybrid Medicaid expansion, which uses federal and state funds to purchase private insurance for low-income residents. A pair of vacancies in the state Senate has created uncertainty whether there’s the three-fourths support needed to pass the Medicaid budget bill, which includes the expansion program.
The program was already destined to be an issue in the gubernatorial primary and general election. But the questions from Democrats and some Republicans over Hutchinson’s budget plan also show other areas where the governor may face skepticism in his re-election bid.
Republican Sen. Bryan King, a frequent critic of Hutchinson and the Medicaid expansion plan, derided the governor, noting last week’s budget plan was lower than what he originally presented to lawmakers before the 2017 session.
“When you say you’re going to spend $100 million next year and then you come out and say you’re only going to spend $50 million, you don’t save $50 million,” King said.
Hutchinson’s plan to set aside surplus money also prompted complaints from Democrats who worry other needs are being sacrificed because of a desire to cut taxes deeper next year, a theme that could come up again in the general election. They noted Hutchinson’s budget proposal was unveiled a day after the University of Arkansas for Medical Sciences said it would lay off 258 people and eliminate hundreds of other positions to close its deficit. Some Democratic lawmakers are also saying they’ll push for funding for more probation officers.
“I don’t think this is responsible to suggest that we have a surplus if we are not meeting the needs of our people, and in the end that is our job,” Democratic Sen. Joyce Elliott said.