Governor Hutchinson’s Address to the Arkansas General Assembly Ahead of the Special Session
May, 19th 2016
Speaker Gilliam, President Dismang, members of the Arkansas General Assembly… Thank you for coming together in response to my call for this Extraordinary Session of the legislature.
As you know, the overriding and primary concern of this session is to deal with the need of highway funding here in Arkansas to make sure that we have adequate funding for our highways, roads and infrastructure.
Now, as you know, there’s been a few other items added to the agenda, and I know you like history. There have been 36 special sessions since 1966. The average number of items on each call is approximately 34. Governor Rockefeller ranged from a low of 26 items to a high of 72. Governor Clinton, in one session, had 104 items, and another special session had 285. Senator Dismang and Speaker Gilliam, I want to assure you, I’m not going to do that.
Governor Tucker had a high of 44 items. Governor Huckabee had one with 35 items. Governor Beebe slowed it down, and he averaged six items per special call. And I think the lesson from that history, at least what I would derive from that, is that during times of change in our country, and during times of reform in our state, there are times for extraordinary needs for legislative action.
And there is an extraordinary need for legislative action today that justifies this call of the special legislature. As you know, the federal highway plan that Congress enacted, provides for $200 million more in additional revenue for our highways, for Arkansas, provided we make the match.
I just came from a meeting of other governors, and they’re all scrambling as to how they can meet that match. Some do not have the support of the legislature to accomplish that, and they will lose that funding. Arkansas is not in that boat. Arkansas has a way of meeting that match, but it will take your action to accomplish that objective.
We need those matching dollars. And just to reflect back for a moment, this started with the creation of the highway working group that met regularly for six months or more, came up with a list of suggestions and items and options as to how we can both in short-term and long-term meet the needs of our highways in Arkansas.
I rejected some, I adopted some, I incorporated them, but many of the ideas that form the “Arkansas Highway Improvement Plan of 2016” generated from that working group and generated from ideas from this body. They have incorporated them into this plan – surrounding a premise that we need to meet the matching funds – a need to have a flow of money to our highway department and without raising taxes. That was the premise that was the foundation of it, and that arrived at the highway plan that will be introduced for your consideration during this session.
Let me emphasize – and I want to particularly call out Representative Andy Davis for a second. I see him, he did an incredible job in helping to shape the working group and some of the ideas and recommendation that came out of this plan. Thank you, Andy, for your leadership.
I want to emphasize a couple points. This is not a one-time fix. Some of you would like to characterize this as a one-time fix, and then we’ll move on and do something else. There’s always the option of doing something different down the road. That’s why we meet from time to time. There’s always a constant debate, there’s always a way to look at doing more, but I do not view this as a one-time fix. It’s a plan to meet our match for the next five years or more.
Secondly, it will allow us to address our immediate funding needs without raising taxes. And people say, well, why are you so fixated on that? Well, fundamentally, I don’t believe it’s the right time to raise taxes for Arkansans that are enjoying a lower gas price at the pump. They have more money in their pocket, they are enjoying that, they are able to spend and do things for their family. I don’t want to take that away from them.
Thirdly, as a political reality, it would be difficult without going to the voters, for this body to adopt an increase in taxes. And so, it’s the right approach and that’s the approach I’m presenting to you.
The fourth thing it will do, and what we’ve got to keep our focus on is that passing the “Arkansas Highway Improvement Plan of 2016” will allow the State of Arkansas to access $1 billion in highway funds over the next five years. That is important for our state. It is not something that every other state can do, but we can do it here in the State of Arkansas.
And then the legislation will also improve the communication between the Highway Department and the General Assembly. While complying with the Mack-Blackwell amendment, and I’m a little bit old-school – I still call it the Mack-Blackwell amendment – that provided the independence, the structure of the current highway commission.
The legislative oversight that is created in the improvement plan, complies with the Mack-Blackwell amendment, because it provides for a review of rules and reports to the legislature, but no approval is required. And that is something that was negotiated between the highway commission, their leadership and the General Assembly.
I think it’s a fair balance that has been achieved that provides more information, and when you have more information, that means that you’re going to have more knowledge, you’re going to have more understanding of the process. There’s going to be more transparency and ultimately that will build more public support for what our highway commission is doing and exercising their extraordinary responsibilities.
And so, as you know, the details of it, it’s going to provide for a transfer of investment earnings from the Arkansas Treasury of $1.5 million this year and then thereafter increasing to $20 million in year two, three and four, and $25 million in year five. That’s a significant amount of money. This year, in addition, we’ll transfer $40 million in surplus funds that have already been set aside.
In the future, we will allocate 25 percent of surplus thereafter toward our highway needs and by transfer to the Highway Department via the Highway Transfer fund. Now, you say, “that’s unreliable, that’s not predictable in the future.” Well, there’s always some uncertainly in surpluses. But one, you know we manage our budget conservatively, and that’s something we take great pride in the State of Arkansas.
And secondly, we have a growing economy. Now we aren’t always guaranteed a growing economy, but we manage conservatively, and right now, in today’s paper, it was talked about that we currently have a $160 million to $180 million surplus. That will be applied in FY 18, and if you take 25 percent of that you’re already at $40 million. You combine that with the Treasury earnings and the other funds, you’re at $68 million in FY 18 already.
This is a realistic approach to making sure that we can have a continuity and an ability to meet those matching funds each year. And so that’s the essence of the highway improvement plan that I have presented.
As I mentioned, there are a few other items on the call. Let me just address a couple of those. I will not address all of them.
One is the efficiency bill. This is driven by legislators that say we’ve got to do more in terms of efficiency. Your working groups, combined with some of the ideas from the Governor’s Office, resulted in a comprehensive efficiency bill that will provide an end-date to 11 task forces, commissions and boards. This is what the Arkansas taxpayers expect us to do. It will also transfer the Arkansas History Commission to the Arkansas Department of Heritage.
Why are we doing this? Because it will promote archival access. I love history. You like history. We want to promote history. We want to make sure that the public has access to the archives of the State of Arkansas.
But it’s also a matter of proper alignment. I simply believe that the History Commission is properly aligned within the Department of Heritage. You can market it better, you can sell it better, you can provide better access – it’s a good fit.
The efficiency bill also does something that’s important for our foster care system. It provides efficiencies within the Department of Child and Family Services by removing some paperwork requirements for caseworkers. Is that not a good thing?
It’s consistent with both our efficiency efforts and your desire to support the foster children of this state. Another bill that’s been presented to you is the merger of Crowley’s Ridge Technical Institute into East Arkansas Community College.
There is one simple motivation to put this on the call and that is that we provide greater access for our students to financial aid, greater access to courses and greater access to services. It is the right thing to do for our students, and that’s why it is presented.
There’s the levee bill. We recognize in the flooding in recent months and years that our levee system in Arkansas is not adequate. Many of our levee boards have gone by the wayside. They need to be reconstituted. We need authority to accomplish that. The levee bill provides that, as well as greater transparency and information flow from our levee boards to the Department of Natural Resources, so we can start understanding better what is needed in our state for the future.
There’s the Frank-Broyles Publicity Rights Protection Act. This is a leftover from the last session. It is simply one of the vetoes that I did, that you sustained. In my view, it did not provide sufficient protection for amateur photographers across the state. You remember that. Well, the bill has been revised. The bill now has the support of photographers across Arkansas, as well as other groups. It’s a consensus bill, provides property right in photographs of citizens and prevents unauthorized commercial use.
There’s the private security licensing bill. This was driven by legislators that says this is an urgent matter for some of the businesses within your district, so that as we have transferred security licensing to the Arkansas State Police, we need to adjust to make sure we’re clear and provide clarification on what are the requirements on security license. This bill accomplishes that – it should be a consensus bill.
We’ve addressed a problem that’s been nagging in our state for over a decade, and that is the declining fund and increase liability of the Death and Permanent Disability Fund of our Worker’s Compensation Commission. We cannot ignore it. We have to address it. This legislation does it. If it’s not addressed, the whole fund will go bankrupt in six to eight years.
We are addressing that. It has significant support. I applaud everybody for working together with business leaders, with labor, to assure that when the fund ends, we’ll not only have a reduction of the premium tax, but that all the people who relied upon that will be paid and cared for.
We have another piece of legislation that provides a pause on grading of our public schools and a pause for putting schools in academic distress. The reason for this is that we’re in transition to adopt a new accountability system that works for our schools. The federal government has given us more flexibility to accomplish this.
We want to pause for a year so we’re not putting more schools in academic distress during that year, but, at the same time, we will allow people to come off of academic distress. So it’s a fair pause so that we can put into place a new accountability system. It will be well-received by our schools.
There are other items, from juvenile records use for research and other items. But this session, besides the importance of those other items that I mentioned, this session is principally and primarily to adopt a funding mechanism for our highways.
I want to applaud those in this body that have said, “Well, I’ve got a different idea that I feel strongly about.” That’s what your job is as legislators. I have no problem with that, and I applaud you for putting those ideas on the table.
But I do believe that there is one idea that has an opportunity to pass this body, that has the support and will accomplish the objective of providing $1 billion dollars in total highway funding over the next five years, and that is the Arkansas Highway Improvement Plan.
Other ideas that are out there can be considered, can be debated, they can be put on additional legislative sessions. Or, they can be put to a vote of the people. But the primary purpose is to accomplish the immediate and extraordinary need of meeting the federal match through this Highway Improvement Plan. It has the support of the Highway Commission, recognizing that need and this solution, the Good Roads Foundation and Arkansas’s Association of Counties.
And so, ladies and gentleman of the General Assembly, thank you for your spirit. One thing that is special in Arkansas is not just our incredible geography, the growing economy, the low unemployment rate and all that we’re doing, but it is our political system that allows us to debate, to talk – the civility – to accomplish great things for this state.
I enjoy working with you. I applaud your commitment to the people of this state. God bless your efforts, and let’s go home in three days.