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And hello again, everyone.

Thanks very much for joining us.

How to Spend Billions of Dollars.

Governor Sarah Huckabee Sanders has her plan for the fiscal year that begins in mid-summer.

And in a couple of days, the General Assembly will report to the Capitol to consider whether to ratify that plan or make some adjustments.

If the latter, they are likely to be comparatively minor.

Much of the spending, after all, has been gone over already in committee.

These sessions in even numbered years were designed to handle budget matters only unless a lopsided majority of the lawmakers vote to consider other items.

In this edition assessment on the eve of the session from the leaders of both parties in the House, in a moment, Minority Leader Tippi McCullough, Democrat of Little Rock.

First Speaker Matthew Shepard, Republican of El Dorado.

Mr. Speaker, thanks very much for coming in.

Thank you, Steve.

The in these will any legislative session, but particularly a fiscal session, both the legislative leadership usually and certainly the executive hope for a in and out session.

Can you do it this time?

I think so.

This will be my, I guess, third fiscal session as speaker of the House.

And one of the things that I have been proud of is that we've been able to get in and out relatively quickly when it comes to our fiscal sessions.

I think that the membership as a whole appreciates that, and I think that we generally share that goal, that we understand that if we begin taking up a number of substantive matters, that that probably that kind of opens up the waterfront, so to speak.

There could be one or two things that get taken up.

But I think by and large, you're going to see us focused on the on strictly the fiscal matters.

And that's that's my hope.

That's my goal.

And I hope to see us be able to proceed in that in that regard.

Well, let's talk for a second with that.

Could be the right one or two.

That could be right.

So there's a pipeline proposal that the governor has rolled out.

It's large, largely fiscal in nature.

There could be substantive legislation related to that, which is really more not so much about the substance, but the form.

In other words, it might be something that could be done through strictly fiscal, through bills that are strictly fiscal in nature.

But in an abundance of caution, we may go ahead and run that as enabling with right as a as a substantive bill, which essentially, when you think about the difference between fiscal and substantive, at least when it comes to the dealings within the House and the Senate, that's that's in some ways a procedural parliamentary decision that that is made.

And so we could say substantive legislation.

In essence, it's not going to change necessarily what's proposed, but we may go ahead and run it through the procedures that would that we would take up a substantive matter.

The second thing is there is some discussion about trying to adjust the crypto mining legislation that was passed in the previous session.

There's been in certain parts of the states, there's been a lot of discussion about that.

And so we're still working through that process.

Those are the two things that if if there were to be substantive legislation, those would be the two things that you might see.

Beyond that, you know, if you ask 135 members of the legislature, probably every one of us has things we would like to do.

But at the end of the day, I think those are the two that might have an opportunity to move forward.

Well, the second one that you mentioned, the gentleman from Berryville, Senator King.

Right.

Is very anxious to address the bitcoin mining aspect of this thing.

Is there any appetite?

How do you judge the appetite?

Certainly on your chamber, to take that?

I think it remains to be seen.

I mean, quite honestly, there's probably been more discussion on the Senate in that doesn't mean that there hasn't been discussion in the House in but this has been a probably a hotter topic on the Senate in and they have worked to try to come up with some with some compromise legislation.

And so those discussions are ongoing.

You know, I think we're at a point where I'll be talking to the members of the House, sharing information with them and taking their temperature.

So far on the House and it remains to be seen.

I do think that that there is a possibility, but it's just like anything else, you kind of have to get into the details of that and finding out that you have the consensus to be able to move that forward.

The administration is quite proud, the government are quite proud of submitting a budget to the General Assembly that is lean, I think, by any definition under I think it under a 2% increase in general revenue spending.

Is it too late?

I don't think so.

It's at about 1.7, 6% increase over last last year.

If you'll recall, the last several years we've held the increase to about 3%.

And there have actually were instances in the last few years where as a legislature, we were we were paring some additional amounts off the budget to get it down to 3% or a little less, even in response to what had been rolled out by the previous administration.

So I think I don't think it's too lean, but I also think that that's that's why you have these you have the opportunity to have it debated.

There's we have been very conservative in terms of, uh, how we've approached tax cuts.

We've been very conservative in terms of how we've approached saving money and setting aside one time money.

So we're going to be able to address whatever issues may arise.

And so I don't think it's too long.

But if there's a need to adjust as we proceed through the fiscal year, there's certainly one time money out there and we have an opportunity to make those adjustments.

Look, look beyond this session and even beyond this.

Well, we used to have biennium, we know, but we had no tax cut bill in this session anyway, as a as of now, that's where we're at.

I think that there could be something, you know, later in the year.

I think that on both ends, as far as leadership goes and then the governor's office, I think that it's that all have said, you know, we'd like to take a little more time to look to see where we're at.

I think that all would like to pass additional income tax reduction, but we also understand that the more time that passes in this year, in this calendar year, the more information we're able to gather, the better we're able to plan for the future, because some of the tax cuts that we've passed in the past have just gone into effect in this calendar year.

And so it stands to reason that we want to kind of take our time, let's see where we're at from a revenue standpoint, and then we can make good decisions going forward.

There's not a push back on the part of the legislative branch.

The senior leadership, senior members anyway, who have a lot of fiscal experience.

We're being told that there's some reservations now about the pace of tax reduction.

Honestly, in all honesty, no, because the governor has been, in my view, on the same page with us throughout that.

I would say that probably as we as I look back over the last number of years, I think from a legislative standpoint, we the legislative leadership, we have been we've wanted to cut taxes.

We wanted to cut as much as we could.

But we've also wanted to be very conservative and practical in how we approach that.

We don't want to overextend ourselves.

We don't want to do too much too soon.

And that's what I think you've seen in tax policy over the last number of years.

You'll recall that I believe it was two years ago, maybe three years ago, we passed that.

It was two years ago.

It was the belief that was the largest tax cut in the history of the state, too.

We've we've had we put in place essentially that it wasn't a trigger that would trigger tax cuts.

It was actually kind of a safety net that if the revenue wasn't where it should be, then we would push off the tax cuts.

But actually what we were able to do was come back later and expedite those tax cuts.

And so that's been, you know, I think a philosophy from a legislative standpoint.

But quite honestly, the governor has shared that philosophy.

I think as we've approached this fiscal session and this year is there's no need right now to bring a tax cut forward when we can take more weeks, a few more months and see where we're at and anticipate we'll continue to be on the same page.

Revenue collections tend to continue to be robust, but the trend line, obviously with tax cuts is going to be a little bit down.

Are you concerned about where we're going in terms of state services, particularly the voucher programs about to be extended?

You're doing that in stages.

The administration's doing it in stages.

Yeah, I'm I mean, it's just like anything else that we deal with.

I'm comfortable with where we're at right now, but you have to continue to monitor and you have to continue each each year that rolls around.

You have to take a fresh look at everything.

You know, when it comes to the educational freedom accounts, those amounts are set generally by the General Assembly through the budgeting process.

And so there's ample opportunity from year to year to be able to address where we're at as a state.

You're right.

I think that there are in particular when you consider that, that we're not going to have the amount of federal money flowing into the state that we have in the previous post COVID era, so to speak.

But I still am very comfortable with where we're at in terms of our tax reduction, in terms of tax cuts.

I believe we can do more.

And I think that that's what you've seen in the past.

This is kind of the same discussion that we've had for the last five and a half years as Speaker of the House.

Can we do more?

Is it too much, too soon?

And what we've been able to do is we've been able to consistently continue to cut taxes while at the same time we've been able to bend the bend the curve on the growth of government, deliver services at a high level.

One of the things when you go back to Governor Hutchinson, you think about transformation that kind of interrupted by COVID.

But now Governor Sanders is picking up with some of that with an increased effort on efficiency that you're going to see improve services going forward.

And then in the meantime, we've been able to build up a restricted reserve fund and various funds just just in case there is a downturn.

We've got those funds set aside.

And so I think we're in a very strong position.

There is an obviously, this is going nowhere without the support of the administration, but there would appear to be mounting pressure in the health care community, both public and private institutions, on reimbursement, Medicaid reimbursement rates.

Can I have your thoughts on that, Mr. Speaker?

And what to do?

I mean, what would you tell hospitals in peril, you know, particularly now with the end of federal funding?

Sure.

And and when you think particularly of rural hospitals, that's something that we've we've as a General Assembly and with the administration that we have worked on, we've dealt with, we've been able to provide support to keep our rural hospitals open.

And so we understand that that is a that is a pressing challenge, particularly as we shift from the COVID era into this post-COVID world.

Reimbursement rates have always they're they're they're a a constant discussion just in terms of there's always a push for higher reimbursement rates.

You know, I'm confident that that's something that's that has that the executive branch DHS that they're always looking at.

I think there's always discussion.

I think you've seen over time that in various areas we've increased reimbursement rates in certain areas that maybe it hasn't been the once over overhaul, so to speak.

But I think you'll see as we move forward over the coming months, I mean, I think that that's going to continue to be an ongoing discussion.

And, you know, from a from a legislative standpoint, we want to make sure that we're doing what we can to be able to provide the services when it comes to health care that Arkansans deserve.

So, you know, I think that's kind of a wait and see is really what it comes down to.

Speaker Matthew Shepard, thanks very much for being with us.

Come back soon.

Thank you.

All right.

See you a little later in the session.

We trust that.

We'll be right back.

We are back.

And joining us now is the minority leader of the House of Representatives, the Honorable Timothy McCullough, Democrat in Little Rock.

Thank you for coming in.

Thank you for having me.

Same question to you up top.

As to the speaker before you, we had the governor is is quite proud of having submitted a budget that's less than 2% so substantial.

Yeah.

And in percentage terms it's quite lower than the previous budget.

Is it too low?

Is it too lean?

I would say so because of many of the needs that we have.

And also considering that 100 million of it, round 100 million of it is out of 109 million is for loans, which is still has a price tag that we don't quite know what it is.

We don't know how sustainable sustainable it's going to be for teacher raises.

We know that Lawrence is the education program, which.

Right.

Okay.

That's right.

We don't know how sustainable that's going to be.

We don't know if the raises that the teachers got will be sustainable.

We don't know what the final price tag is going to be.

There are so many things that we don't know about that yet.

Plus, there are other needs.

I feel like in our budget, some of those being making sure that the our our state staff, our state agency, the people that work for the state have the kind of raises that they need.

You know, we're also still worried about the maternal mortality rate feel like that that could have been expanded to the one year.

They're just I feel like that there are lots of needs.

Our prisons are overfilled and feel like we need to be doing more mental health work, more substance abuse, help to try to work on the other end of that and help with recidivism.

Otherwise, we just seem to continue to have a revolving door into our prisons.

Well, let's stick with Lawrence for a second, which you brought up The the program, the voucher program is going to be expanded, according the administration alarm bells for you.

Sure.

Public public money going into private schools, which is it may be already happening is seems to be probably kind of a a way to give almost tax breaks to two wealthy people in a way, some people that can afford to send their kids to private school and everything are the ones that are being able to use this money right now.

And if we can, we don't know if that amount is going to be sustainable for people.

If that amount happens to go down somewhere, that makes it harder for other kids and their parents to have school choice.

But yeah, there's just lots of questions.

What school choice the administration argues and its other advocates argue, is essential to improving public education.

It is a key driver of improve.

It is.

And that's choice, competition and public education.

I don't I don't think so.

I think that many parents make that choice to send their kids to private schools.

I've always believed that parents should have the choice of where to send their children to school.

However, sometimes sacrifice goes along with that, and I believe that our public schools are what traditionally have educated everyone.

Come one, come all.

We're going to educate you.

And I believe that this is going to drain our public schools of their resources and students and drag our our system down to where it may destroy it.

This this voucher system hasn't worked in any other state.

And it's having problems in places such as Arizona.

Are you being a little severe when you say destroy?

I don't think so, because this has been proven in state after state not to be a really successful way to do things.

I believe that once again, the public schools are who have served everyone and 95% of our students go to public schools with only but I feel like now that we're starting to look at that other 5% and try to fund those instead of help, the ones that that we have in our public schools.

When you look at the revenue stream, they're still above projections, but declining on a on a monthly basis.

Tax cuts are coming in.

And also the federal largesse of recent years is about to terminate to what that almost compels a leaner state budget, does it not?

Yeah, probably so.

I of course, tax cuts.

I still believe that our tax cuts are going to the wealthiest Arkansans and that's what's been happening through the last few tax cuts.

The last one had $150, I believe, for a year for for middle or lower economic families.

And the the I believe we're going to do things that we need to do them for families.

I need we may need to do them for child care, for those kinds of issues.

So parents are able to go to work and everything.

But this continuing, it's almost like in to me, instead of bold moves that are being said or they're being taken, I feel like we're doing old moves and we're still doing tax cuts for the the richest that are supposed to trickle down and help our economy.

And that's been proven over and over not to work.

And I feel like once again, to bring up the prison system again, I feel like it's still the same punish and have that revolving door over and over instead of helping people reenter life.

And and I'm not talking about the most violent of criminals.

I'm talking about especially people with mental health and substance abuse problems, as is the latest numbers that I have seen in staffing from the Department of Correction.

A Frankly, pretty spooky.

Is there a significant impetus in the General Assembly to do something about those staffing levels through appropriations?

I don't know about through appropriations.

I mean, I hear a lot of talk about it and a lot of meetings.

It's brought up, I believe.

And one of the meetings, one of our senators asked if it was true that over half of the workers in the prisons are women.

And I heard that that was true.

I think they're probably underpaid and overworked.

And for sure we don't have as many as we need to have and to continue.

I don't think we can prison build our way out of this situation.

I think we're going to have to do something different to try to make sure that we're not just filling up prisons and not having the staff to take care of that because that becomes a dangerous situation also.

Go beyond this fiscal session and to interrupt the fiscal or to to add to the session with substantive legislation, you know, it's a forbidding high threshold as you have to look beyond this session.

If you would, Madam Leader, and see and tell me how much sentiment there is in your chamber anyway toward addressing some of the social programs that that you've mentioned just now.

For example, Medicaid and Welfare, the Department of Corrections, staffing, K-12 education, higher ed Oh, I think all of those are real high on our priority list.

That's the issue right now is being in a super majority, you know, is getting also bipartisan help to do a lot of these things.

And I think there is concern and everything.

But once again, a budget, you know, to swing it back to the fiscal session, a budget shows what your priorities are.

That's the ultimate policy statement as a budget.

That's right.

I mean, that's where the truth is.

And actually what we're not just what we're saying, but what we are actually doing.

And that just does not seem to be the case, at least in this fiscal session in terms of of expanding Medicaid.

Mr. Pilkington, in your chamber has been a very vocal and persistent advocate of expanding Medicare in terms of post-natal care.

Is there probably not in this session, but he said he's going to introduce it again.

Is there movement in his direction?

Well, from from our viewpoint, you know, we're we would all love to see that expanded to the to the one year and ah, I'm glad that he says that he's going to try to try that route again.

Neonatal.

Yes, yes, yes, yes.

But we've been told that that they're looking at other avenues to try to help this issue in Arkansas.

A lot of it kind of maybe public health announcements and trying to get point mothers toward resources that that could help them.

And they say that that will take care of the issue.

That's the administration's position.

That's right.

But it is I believe that this has been proven in other places.

Many other places are going.

The route to expand it to one year seems to be something that's working.

And I wish that we would also go that route.

And, you know, kudos to to represent Pilkington for for continuing to try.

In terms of just raw partizan politics, your party has a you know, a niche really in the House or end of the Senate, the General Assembly.

You in the near term, do you see any daylight for the Democratic Party?

Sure.

You know, I believe that a lot of the policies that are going on right now are things that we can use.

And in campaigns, I believe Lawrence has been controversial.

I believe that with accountability and transparency, there are issues that have come up, such as for accountability as far as information.

That's right.

As far as accountability.

Private schools not having the same rules that the public schools have.

So I believe there are lots of issues that are coming up.

And you will see often people kind of buck against what the legislature is doing by having these ballot initiatives.

And we're just seeing an onslaught of that this time an extreme abortion policy that doesn't even have exceptions for for rape or incest, where we're victims, we have victims that are hurt by criminal activity.

I believe that there are lots of I think there's lots of ways that we can message that we have a better way for a a healthier a safer a fairer and a brighter Arkansas.

The administration has the governor has put a lot of it would appear, a lot of her prestige on the line in terms of sending her staff members.

They're no longer on the state payroll, I'll make that clear.

But they're out to actually really campaigning against some of these initiatives.

Is that a mistake on her part?

Well, I mean, I'm never going to speak for the governor.

I know that she she has her plan and her ideas, But I believe that in some ways, when you look at large and then when you look at actively participating against these people, initiated initiatives, that in a sense you are putting your eggs in these baskets.

Maybe not one, but just a few.

And that that she will have to hope that that those baskets don't topple over in some way and programs don't go the way that she thinks that they they would or whatever.

And then then I think that that can hurt you brought up the the issue of abortion.

It has been strict stern abortion laws seem to be an issue that works thus far.

The last several year and a half has worked against Republican incumbents of the Republican Party.

How do you see sentiment in Arkansas?

Well, I'll make I think and of course, this is just anecdotes from people talking to people when they're knocking on doors and everything.

But I, I feel that the sentiment in a lot of areas are that we're too extreme.

We have gone too far.

And of course, for many women, but also for men from fathers, that this is just too extreme and that we have got to to look at other ways to do this.

And you're right.

I think I think that that it is hurting Republicans.

And in many ways, we have seen it in other states.

Yeah.

Overall, do you anticipate a quick session?

Well, that's that's what we always all hope for.

And in my talks to two leaders, I've heard them say they would like to get in there and then get out as quickly as we can, get our business done.

We know that during COVID, we were able to do it in about three days.

So we know that it can happen.

Most of us don't want to open up the session to, you know, other bills because we believe most of most of those things, unless they're emergency type things, can wait until the regular session.

So I'm for sure going to be hoping for one.

All right.

Representative Tipton McCullough, the minority leader of the House, thanks very much for coming in.

We'll see you after the session is over.

All right.

Thank you.

All right.

Come back soon.

And that does it for us for this edition.

As always, we thank you for joining us and see you next week.

Support for Arkansas Week provided by the Arkansas Democrat-Gazette, The Arkansas Times and Little Rock Public Radio.