The legislature is already taking up Governor Bobby Jindal’s charge to move a bill to phase out the income tax, just a day after the governor ditched his own plan for repeal.
In his speech to lawmakers Monday, Jindal didn't mention maintaining his requirement that any new tax changes be revenue neutral.
Tax Reform
The former point man for the governor’s plan, Tim Barfield, told the Senate Committee on Revenue and Fiscal Affairs that's out of his hands. “My marching orders are clear, are to go work with the bills and see what we can do with those," Barfield said, shakily. "It would be my desire to look at eliminating income taxes.”
Sen. JP Morrel echoed the committee’s sentiment, saying it would be irresponsible not to make up any revenue lost by eliminating the income tax.
House republicans issued a statement saying they would only support a plan that cut the income tax "responsibly." They did not specify if that meant raising revenue or cutting spending.
Arkansas' Medicaid Expansion
The Senate Committee on Health and Welfare heard via phone from Ray Hanley, a health care official from Arkansas. Arkansas is considering using federal Medicaid expansion money to subsidize payments in a private insurance exchange.
Hanley says the problem is that market forces don’t push companies to cover low-income counties. “The insurance commissioner here is going to deal with it," Hanley said. "[The Commissioner has] already said, if the insurance plans come in and propose, if they want the populace, the affluent counties, up in Northwest Arkansas, they’re going to have to take parts in the Delta.”
The Jindal administration has steadfastly opposed expanding Medicaid. Dept. of Health and Hospitals interim secretary, Kathy Kliebert says the Arkansas plan is still too risky. The federal government will provide funding in full for the first three years, but will provide 90 percent in the fourth year.