Conduit’s 2021 Arkansas Legislative Scorecard

Conduit for Commerce Releases Arkansas Legislative Scorecard for the 93rd General Assembly Regular Session 2021

FAYETTEVILLE — Conduit for Commerce released its Arkansas Legislative Scorecard for the General Assembly’s 2021 Regular session. This scorecard calculates and ranks each legislator’s voting record on economic related bills for the regular session though April 2021.

This Legislative Scorecard is an invaluable resource for Arkansans to learn how their state legislators voted during the General Assembly and compare those votes to the mission of Conduit: more economic freedom for all Arkansans. There are four factors when determining if a bill is good or bad as they relate to economic freedom to Arkansans. This Economic Freedom Filter analyzes bills that do the following: 1. Increase or decrease the size and scope of government; 2. Increase or decrease dependency on government; 3. Does it spend money we do not have, and 4. Increase or decrease transparency in government.

For the first time this year, Conduit analyzed and scored votes on “social freedom” issues. Those bills focused on issues of individual freedom and social order, such as abortion, the 2nd Amendment, election integrity, COVID-19 response/freedoms, and other legislation impacting social issues or individual freedoms.

Conduit for Commerce not only scored each legislator’s voting record, but Conduit also awarded the top scoring legislators for their outstanding record. This year, CFC will be awarding Calvin Coolidge awards to the top 20% of the Senate and House for their voting records.

This scorecard represents how the legislators actually voted this General Assembly. CFC did not take into account their rhetoric or their tweets and failed promises. Actions and votes are what matter most, and that is what their constituents must know.

Follow the Money Report: Selected 2020 Arkansas Republican Primaries

Have you ever wondered who controls Arkansas?

Follow the Money on 2020 Republican primaries to find out. The research team at Conduit for Commerce compiled an in-depth, comprehensive report following the money on selected 2020 Republican primaries.

The 2020 Republican primary gives hope to Republicans who support the party principle of limited government. Most winners in the primary were either limited government Republicans or favor a limited government position with exceptions. The 2020 Republican primary results are the opposite of the 2018 primary results where establishment Republicans won the day. Establishment Republicans are those who favor bigger government. Establishment Republicans tend to be well funded by special interests.

Conduit for Commerce collected contribution records from the Arkansas Secretary of State Financial Disclosure website, then sorted, tagged, and analyzed those against additional research of the contributing persons. This analysis allowed grouping between similar interests, entities, and persons. We could see who were the “big players” in Arkansas politics, whether contributions came inside or outside a legislative district, and allowed for a peak at the special interests behind the political contributions.

The reader is encouraged to use these findings as a blueprint for predicting future votes by these elected officials as various special interest issues come before the Legislature in January 2021.

If you want to know which way the political winds are blowing, it helps to know which way the campaign funds are flowing.

The report provides in depth analysis of fundraising for the following state legislative primaries:

Marrietta McClure vs. Tony Furman – House District 28

David Ray vs. Karyn Maynard – House District 40

Cole Peck vs. Bobby Long vs. Jon Milligan – House District 53

Ken Yarbrough vs. Brandt Smith – House District 58

Chris Latimer vs. Kendon Underwood vs. Jana Della Rosa – House District 90

Delia Haak vs. Jorge Becker vs. Scott Richardson — House District 91

Adrienne Woods vs. John CarrHouse District 94

Paige Dillard Evans vs. Nelda SpeaksHouse District 100

 

Jeff Crow vs. Alan ClarkSenate District 13

Dan Sullivan vs. John CooperSenate District 21

Ben Gilmore vs. Bill DunklinSenate District 26

SELECTED RACE GENERAL ELECTION ADDENDUM TO BE RELEASED EARLY 2021

Download (PDF, 1.91MB)

Conduit’s 2019 Arkansas Legislative Scorecard

The Conduit for Commerce (CFC) Legislative Scorecard is a resource for Arkansans to learn how their legislators voted during the 2019—92nd General Assembly and compare those votes to the mission of Conduit: more economic freedom for all Arkansans. Legislation during the session is reviewed and analyzed by Conduit for Action, a sister organization to CFC. Based on those recommendations’ CFC has drafted this legislative scorecard. Bills are included into the scorecard by using the
CFC Economic Freedom Filter. The scores are based entirely on a legislator’s own voting record on bills scored.

Economic Freedom Filter
The Economic Freedom Filter is the method by which CFC determines if a
bill is good or bad for increased economic freedom for Arkansans. The
Economic Freedom Filter analyzes bills that do the following:

  1. Increase or Decrease the Size and Scope of Government
  2. Increase or Decrease Dependency on Government
  3. Does It Spend Money We Do Not Have
  4. Increase or Decreases Transparency in Government

If legislation falls into these categories, it is considered for scoring. CFC
will support bills that decrease the size and scope of government,
decrease dependency on government, saves money, or increases
transparency in government. CFC will oppose bills that increase the size
and scope of government, increase dependency on government, spends
money the state does not have, or decreases transparency in government.

Awards
Conduit for Commerce awards the top scoring legislators on the CFC scorecard for their outstanding voting records. These awards reflect the most fiscally conservative legislators based on their actual votes as they compare to the CFC Economic Freedom Filter. CFC has held a biennial Calvin Coolidge Awards Dinner honoring these top legislators since
2013. This year CFC applied the Ronald Reagan 80% rule. If a legislator got an 80% or higher on the CFC scorecard, they will receive a 2019 Calvin Coolidge Award for their outstanding voting record in the 2019
legislative 92nd General Assembly.

The 2019 Conduit Calvin Coolidge Award Winners:

Sen. Trent Garner (SD27)

Rep. Dan Sullivan (HD 53)
Rep. Austin McCollum (HD 95)
Rep. Clint Penzo (HD 88)
Rep. Grant Hodges (HD 96)
Rep. Marsh Davis (HD 61)
Rep. Robin Lundstrum (HD 87)
Rep. Josh Miller (HD 66)
Rep. Rick Beck (HD 65)
Rep. Mickey Gates (HD 22)
Rep. Justin Gonzales (HD 19)
Rep. Frances Cavenaugh (HD 60)
Rep. Mark Lowery (HD 39)
Rep. Nelda Speaks (HD 100)
Rep. John Payton (HD 64)
Rep. Richard Womack (HD 18)

Tax Reform and Relief Task Force Recommendations

Note:  This article is revised and re-posted for use by the reader for the following three purposes: 

1) Assessing the laws passed as “tax reform” by the 92nd Arkansas General Assembly of 2019;

2) Use for future tax reform which will strengthen the Arkansas state economy; and

3) Assessing the effective job of this tax task force as we consider whether a task force is useful in producing better state policy (as opposed to using the committee system already in place.) 

We are reminded here that under our Revenue and Stabilization Act, Arkansas government spends all it takes in.  Therefore, the best tax reform for Arkansas remains to be one springing from capped and reduced government spending starting with the question —“How much do Arkansans want to pay their state government for its services?”  BVT–June 12, 2019.

******

Tax Reform and Relief Task Force’ Recommendations

By Brenda Vassaur Taylor, JD, LLM (Taxation)

October 30, 2017

Disclaimer—These are the views and opinions of the author only and may not be shared by others.

It is the objective of Conduit for Action (CFA) to offer to the Tax Reform and Relief Legislative Task Force recommendations for legislative changes which, not only reduce the size of government and therefore increase economic freedom for all Arkansans, but also:

  • Modernize and simplify the Arkansas tax code;
  • Make the Arkansas tax laws competitive with other states in order to attract businesses to the State;
  • Create jobs within the State; and
  • Ensure fairness to all individuals and entities impacted by the tax laws of the State of Arkansas.[i]

(Note:  These recommendations come from experienced Arkansas tax attorneys, certified public accountants, economists, and small Arkansas manufacturers who live and work in Arkansas.)

How Can Arkansas Afford to Cut Taxes?

Before we can have tax reform in Arkansas, it is absolutely necessary that we recognize that in Arkansas, we simply budget and spend all we take in.  Therefore, in Arkansas, as a direct result of the Revenue Stabilization Act (RSA 1945), the level of government spending in Arkansas is directly determined by the tax system not the budget process

While we appreciate that the RSA requires that we balance the budget, under the current A, B, C priority budgeting system, the legislature, with help, designs an annual budget that always “cries for more money.”  Under this system, as state dollars come in, “needs” are met (priority A), next the “wants” (priority B) are funded, and in good years the “wish list” (priority C) is filled.  Surpluses are also dumped into “rainy day funds” or the now unconstitutional “general improvement fund”—guaranteeing all annual revenues are spent.

The fact that the tax system determines revenues as well as spending was illustrated in a recent answer by the Arkansas Bureau of Legislative Research in its RFP No. BLR-170002- Q1 to a prospective tax policy consulting firm with the response that the tax task force with the assistance of its chosen Consultant will determine the amount of revenue that the state needs to raise for public service.

In Arkansas, the partnership of the RSA with those seeking more government solutions means there is no “getting spending under control” in our state as echoed at the Federal level.

It is merely a question of

“how much do the people of Arkansas want to pay for government?”

The authors of a recent research paper sponsored by Mercatus Center, George Mason University expressed this fact in the following terms:

“Taxes are the “tail that wags the dog” in Arkansas budgeting.  If taxes are raised, government spending is guaranteed to go up.  If taxes are cut, spending is guaranteed to go down. The level of spending is set by the tax system itself. Understanding this fact is crucial to understanding why government spending has increased in Arkansas.  …[I]n large part, the absolute size of Arkansas’s spending is determined by the tax system”.[ii] 

Therefore, if you want spending reduced in Arkansas, if you want smaller government, you simply cut taxes!

1-What We Pay & Can Afford:  So if spending is too high, how much do we pay in taxes?

Again, citing the Mercatus report,

“Arkansas uses all the major tax instruments available to states, including income, sales, and property taxes, while some of Arkansas’s neighbors do not have certain taxes (notably, Tennessee and Texas have no personal income tax).

The overall state-and-local tax burden—10.1 percent—is the highest among the competitor states, and it is the 17th highest in the nation.  

Arkansas has the second-highest average state-and-local sales tax rate, at 9.3 percent. The top marginal state income tax rate is 6.9 percent, the second highest among our competitor states …, and two border states have no individual income tax (Texas and Tennessee).

The corporate tax rate is also the second highest among Arkansas’s competitor states, at 6.5 percent…  All these data points show that taxes are high in Arkansas compared with border and competitor states, and even compared with the nation in some cases.[iii] 

It took BLR, 192 pages to summarize all 10 categories of taxes in Arkansas for the legislature in October 2016 in its bi-annual preparation for the general session.[iv] These also include the regulator taxes and fees not mentioned by Mercatus.  It includes not so visible taxes like the 2.5 percent tax on insurance premiums which yielded over $169 million, a 43% increase in receipts from the previous year (FYE June 30, 2015.)  (It is also worth noting—insurance companies like all big corporations do not pay taxes—they simply pass on the cost of the tax to the consumer—i.e. the 19.3% increase in insurance premiums recently announced by Arkansas BCBS starting January 2018.

The Mercatus report also cites comparisons showing Arkansas spending per capita at $7,674 as the highest spending per capita among the boarder and comparable states.

“Arkansas spends almost 24 percent more per capita than the state with the next-highest spending, Mississippi. On average, Arkansas spends over 59 percent more than its competitor states, which spend an average of $4,815 per capita. Compared to its border states, Arkansas still spends 51 percent more than their average of $5,072.[v] 

Removing federal government spending,

Arkansas still has by far the highest state government spending compared with the competitor states. The amounts for other very poor states, such as Mississippi, do drop significantly …., but Arkansas remains at the top. The full group of competitor states spends on average $3,192 per capita, and Arkansas spends almost 72 percent more, at $5,481.”

Spending may be acceptable if one can afford it (and it gets you where you want to be!)  But Arkansas’s gross domestic product (GDP) per capita trails the national average of $55,295 in 2015 and ranks among the lowest compared to its peers.

“In 2015, Arkansas’s per capita GDP of $41,299 trailed the per capita GDP of Texas, Louisiana, Missouri, Tennessee, Oklahoma, and Florida, but exceeded the per capita GDP of Mississippi (Figure 1a). Each state in the region except Texas is below the national average.” [vi]

The high overall state spending in Arkansas is most notable for such a poor state!  It is time to let the people take charge of their own money to seek a better outcome.

2-Specifics Reforms:  What changes are needed?  CAVEAT:  One must clearly understand that in no way should legislators consider broadening the tax base or elimination of exemptions unless and until tax rates are significantly cut.  Waiting to cut rates while broadening the tax base and eliminating exemptions is simply a tax increase.

Corporate Tax Reform:

  • Totally Eliminate the Corporate Income Tax.
    • This income stream is the most volatile and is in fact double taxation passed on to the consumer.
    • The state already recognizes reducing taxes on companies increases economic development when it regularly choses certain companies for give tax give a-ways.
    • Pair this with a complete repeal of corporate welfare spending programs which include state and local tax incentives.
      • Corporate Welfare picks winners and losers, distorts the economy, and shifts current businesses tax dollars to competing companies. BLATENTLY UNFAIR!!
      • End the Corporate Welfare Quick Action Closing Fund Tax Incentive Program.
      • Repeal Corporate Welfare Tax Subsidies including: Create Rebate, ArkPlus, Equity Investment Tax Incentives, Research and Development Credits, and Advantage Arkansas.
      • This will also allow local taxing authorities to keep more tax dollars.
    • Eliminate the Corporate Franchise Tax.
      • Stifles growth in business creation in Arkansas
      • If necessary increase the initial filing fee when creating the entity to offset some lost revenue.
    • Eliminate Sales Tax on Inventories
      • Improves competitiveness with other state

Individual Income Tax Reform:

  • Individual Income Tax Rates Reduction and Simplify the Schedules to a single, flat rate of no greater than 9%.
    • Continue the current low-income exemptions and deductions
    • For pass-through business filers, allow complete expensing in year of purchase rather than depreciation
    • AR residents will likely lose the state and local tax deductions at the federal level which is basically a tax increase on AR residents. This should be an added deduction on the state level in order to compensate for the increase in tax at the federal level.
    • Extend the number of years for a carryforward of a Net Operating Loss (NOL)
    • Allow for a carryback for a NOL
    • Freeze spending at last year’s level, and implement automatic triggers for rate reductions to be implement for the individual income tax rate reductions over no more than a three-year period as revenue grows.

Reforms to Avoid:

  • Eliminating exemptions without first significantly reducing rates.
  • Broadening the tax base without first significantly reducing rates.
  • Reforms that do not lead to a reduced amount of money going to Government.
  • An Internet Sales Tax or Gas Tax Increase.

Offer to augment tax reform:

Government Spending Reform

  • Recommend a Proposed Constitutional Amendment for a Tax-Expenditure Limit to Contain Government Growth.
  • Tie the limit to the growth in inflation plus population growth.
  • Include a tax rebate mechanism automatically triggered at certain thresholds to return revenue collected above the spending limit.
  • A proposal like Colorado’s TABOR (Taxpayer Bill of Rights) should be considered.

Government Efficiencies Reform

  • Implement Performance Based Budgeting
  • Implement Activity Based Cost Accounting

3-Research or Recommendations Similar to one or more CFA Recommendations:  Below is a list of the most respected and conservative groups and foundations in the state and nation who spend millions developing good economic tax policies.  Guess what!  They have posted research or positions that we find supportive of one or more of our recommendations. This does not imply any of these organizations embrace our recommendations in this article but only to point that their research or recommendations have included positions similar to one or more of our recommendations. The articles on point are referenced in our footnotes.

It is certainly hoped that the members of the tax task force (and all members of future legislative sessions) will take the time to build their own knowledge base so that they will have a bench mark to test their own consultant (and proposed bills.)  It is likely that, like most task forces, this one has a pre-determined outcome.  But it is hoped that its members will reconsider, meet the challenge and learn what is at stake. Again, the following are all directly on point with at least one or more of the issues discussed under section #2 above:

  • Trump Administration[vii]
  • Heritage Foundation[viii]
  • The Heartland Institute[ix]
  • American Legislative Exchange Council[x]
  • CATO Institute[xi]
  • American Enterprise Institute[xii]
  • Freedom Works[xiii]
  • The Club for Growth[xiv]
  • Reason Foundation[xv]
  • Recent Arkansas US Senators vote to eliminate deductions for state and local taxes[xvi]

*****

  • Tax Foundation/ Arkansas Center for Research in Economics[xvii]
  • AR Policy Foundation (Murphy Commission)[xviii]
  • Arkansas Republican Platform[xix]

Conclusion:  It is not a matter of how much we are to spend on government or whether there is a spending problem or a revenue problem.  The question is—how much do the people of Arkansas want to pay for government services?  That is all that determines what is spent in our state.  The current mood in our country has sent a clear message to DC and to Little Rock.  The people want to keep more of their freedoms and more of their own money and want government to have less.  It will be left to another day to discuss the quality of service Arkansans receive for the money now being spent.

[i] Act 78 of 2017 Tax Reform and Relief Act of 2017

[ii] http://uca.edu/acre/files/2016/06/Theres-Nothing-Natural-about-the-State-of-Government-Spending-in-Arkansas.pdf

[iii] http://uca.edu/acre/files/2016/06/Theres-Nothing-Natural-about-the-State-of-Government-Spending-in-Arkansas.pdf

[iv] http://www.arkleg.state.ar.us/bureau/fiscal/Publications/H.%20%20Tax%20Handbook/2016%20Tax%20Handbook.pdf

[v] http://uca.edu/acre/files/2016/06/Theres-Nothing-Natural-about-the-State-of-Government-Spending-in-Arkansas.pdf

[vi] https://files.taxfoundation.org/20161206233223/Arkansas-The-Road-Map-to-Tax-Reform.pdf

[vii] https://www.treasury.gov/press-center/press-releases/Documents/Tax-Framework_1pager.pdf

[viii] http://www.heritage.org/taxes/report/analysis-the-unified-framework-fixing-our-broken-tax-code

http://www.heritage.org/taxes/report/time-real-change-repeal-the-corporate-income-tax
http://www.heritage.org/node/18247/print-display
http://www.heritage.org/taxes/report/the-economic-impact-25-percent-corporate-income-tax-rate

[ix] https://www.heartland.org/publications-resources/publications/research–commentary-maryland-corporate-income-tax-reform

https://www.heartland.org/publications-resources/publications/research–commentary-illinois-corporate-income-tax-reform
https://www.heartland.org/publications-resources/publications/tip-sheet-state-income-tax-reform

[x] https://www.alec.org/model-policy/statement-alec-principles-of-taxation/

[xi] https://www.cato.org/publications/research-briefs-economic-policy/do-corporate-taxes-hinder-innovation#full

https://object.cato.org/sites/cato.org/files/serials/files/cato-journal/2016/9/cj-v36n3-8.pdf
https://www.cato.org/publications/tax-budget-bulletin/state-corporate-income-taxes-should-be-repealed

[xii] http://www.aei.org/?s=STATE+CORPORATE+INCOME+TAX

[xiii] http://www.freedomworks.org/content/state-state-income-taxes

http://www.freedomworks.org/content/freedomworks-releases-principles-fundamental-tax-reform

[xiv] http://www.clubforgrowth.org/issues/taxes/

[xv] http://reason.org/news/show/the-facts-about-the-corporate-incom

http://reason.org/news/show/county-leaders-and-the-elusive-ques

[xvi] Cotton and Boozman voted this week in favor of eliminating the deduction for state and local taxes-ADG-Oct 20, 2017.  See the argument in favor:   http://dailysignal.com/2017/10/17/state-and-local-tax-deductions-stump-growth-says-legislators/

[xvii] https://files.taxfoundation.org/20161206233223/Arkansas-The-Road-Map-to-Tax-Reform.pdf

http://uca.edu/acre/files/2016/06/Theres-Nothing-Natural-about-the-State-of-Government-Spending-in-Arkansas.pdf; Note added 6/12/2019: since the initial publication of this article, the author was contacted by Nicole Kaeding with the Tax Foundation personally to voice her objection that the original article implied agreement by the Tax Foundation were referenced by this author.  Ms Kaeding stated that the Tax Foundation did not agree with the conclusions of the author.  I suggest that the reader personally study all reports referenced in these footnotes.

[xviii] http://www.arkansaspolicyfoundation.org/policy/murphy_summary.html (this one is a little dated but still good policy.)

[xix] http://www.arkansasgop.org/platform.html

Follow the Money Report: Selected 2018 Arkansas Republican Primaries

Have you ever wondered who controls Arkansas?

Follow the Money on 2018 Republican primaries to find out. The research team at Conduit for Commerce compiled an in-depth, comprehensive report following the money on selected 2018 Republican primaries. The takeaway is clear: establishment Republican candidates, whose votes favor bigger government, were elected with the large and unified financial support of Arkansas’ most established long-time special interest groups, which hold no party allegiance.

Conservative, limited government groups have a way to go before they see more of  their limited government candidates win election in Arkansas GOP primaries.

Conduit for Commerce collected contribution records from the Arkansas Secretary of State Financial Disclosure website, then sorted, tagged, and analyzed those against additional research of the contributing persons. This analysis allowed grouping between similar interests, entities, and persons. We could see who were the “big players” in Arkansas politics, whether contributions came inside or outside a legislative district, and allowed for a peak at the special interests behind the political contributions.

The reader is encouraged to use these findings as a blueprint for predicting future votes by these elected officials as various special interest issues come before the Legislature in January 2019.

If you want to know which way the political winds are blowing, it helps to know which way the campaign funds are flowing.

The report provides in depth analysis of fundraising for the following state legislative primaries:

Breanne Davis vs. Bob Bailey – State Senate District 16

Representative James Sturch vs. Senator Linda Collins-Smith – State Senate District 19

Cole Peck vs. Representative Dan Sullivan – House District 53

Representative Bob Ballinger vs. Senator Bryan King – Senate District 5

Representative Mat Pitsch vs. Frank Glidewell – Senate District 8

Scroll through or download the full report below. 

Download (PDF, 1.28MB)

2017 Legislative Scorecard: Ranking of the 91st General Assembly

2017 Ranking of the 91st General Assembly

Regular and Special Sessions– January-May 2017

By  Conduit for Commerce

June 13, 2017

 

Much like any specific vote, scoring of votes by Conduit for Commerce (CFC) is not an exact science as some bills have a greater impact on Arkansas if passed.  However, the weekly pre-vote publications (score cards) released during the Regular Session by Conduit for Action (CFA) referencing specific bills is reflective of the measure used in CFC’s final vote tallies.

Likewise, only bills which reflect the focus and mission of CFC are taken into account when deriving these rankings.  Therefore, our scoring is weighted for principles based upon the following preferred outcomes:

  • Reduces the size of government,
  • Reduces dependency on government, and/or
  • Reduces spending by government.

Votes cast by legislators on bills on the floor and during committees (when known) are all considered.  In total 30 Senate floor votes, along with three supportive committee votes, were scored.  For the members of the House of Representatives, 35 floor votes and 13 committee votes were included in the scoring.

It is believed that the methods used by CFC will ultimately yield a better assessment of the pattern of voting by a specific senator or house member.  It is our goal to assist voters as they measure differences in their expectations and results.  Ultimately our intent is that the voting pattern of these elected officials, as they relate to the above principles, is made clear.

Likewise, as the methods and results of the CFC rankings are compared to other groups, differences may be noted.  These differences should be filtered with the understanding that CFC is an Arkansas founded and small business focused organization, which not only understands the fiscal impact of these bills, but is able to use knowledge and background regarding directly related issues which may not be apparent to national groups.

(Note: Floor votes on bills reflected at the following government site: http://www.arkleg.state.ar.us/SearchCenter/Pages/historicalbil.aspx  This is the third Regular Session Report Card, starting in 2013, published by Conduit for Commerce.  For more information contact brenda@conduitforcommerce.org)

 

 

 

 

 

 

 

[table id=4 /]

[table id=3 /]

 

Any typographical errors will be promptly corrected.

 

 

2015 Calvin Coolidge Award Winners — Heroes of Freedom

Conduit for Commerce
2015 Calvin Coolidge Award Winners–Heroes of Freedom
Winners and Scoring Methodology
Scores Senate
25 Collins-Smith
23 Flippo
23 Rice
22 B. Johnson
22 B. King
16 G. Stubblefield
House
25 Copeland
25 Speaks
22 Jean
22 B. Smith
22 Ladyman
19 C. Douglas
19 Tosh
18 Wallace
17 Richmond
17 G. Hodges
17 Bentley
17 Miller
17 Deffenbaugh
15 M. Gray
15 Payton
15 Sullivan
Much like any specific vote, the CFC scoring of bills, committee votes (when known) floor votes, primary sponsorships, and co-sponsorships is not an exact science or a technique which may be described as linear. Our scoring is weighted for principles based upon the following preferred likely outcomes: 1) reduces the size of government, 2) reduces dependency on government, and/or 3) reduces spending by government. It is believed that this method will ultimately yield a better assessment of the pattern of voting by a specific Legislator helpful in measuring differences in expectations by voters. Ultimately it is the intent of CFC that the voting pattern of these elected officials, as they relate to the above principles, is made clear. July 31, 2015

General Improvement Fund – A Reelection Tool

Reprinted from Conduit for Action; By: David Ferguson

GIF-The members of Arkansas General Assembly are given discretion over millions of dollars in General Improvement Funds (GIF). For the 2015-2016 fiscal year $20 million has been set aside for the whims of legislators.  Each legislator determines how “their share” is spent. Some designate their share to go to a college others have the funds sent to the Department of Finance and Administration to then be sent to one of the eight planning and development districts and then awarded as grants.

The public is not privy to exactly how the money is divided among legislators, but if the House and Senate each received $10 million, and then with each Senator getting an equal share and each Representative getting an equal share, then each Senator would have discretion over $285,714.28 and each Representative would have discretion over $100,000.

Why are state funds distributed upon the discretion of an individual legislator instead of through a formula or perhaps retained for other needs? $20 million helps incumbent legislators gain favor in their districts.

2014 Election

Republican Doug Driesel, who ran against incumbent Democrat Representative Scott Baltz in District 61, stopped by a rural fire department to campaign.  According to Driesel, several firefighters told him they liked what he stood for, but that they couldn’t vote for him because Baltz had gotten General Improvement Funds for their fire department.

Blaine Davis ran as the Republican candidate in the adjoining District 60, against incumbent Representative James Ratliff. Recently, I asked Davis if he had a similar experience with fire fighters in his race. Davis responded:

 “Absolutely.  Several that I’d known for literally forever told me they would have to support him or just groaned when I told them who I was running against.  He’s given thousands to every one of them [fire departments].  Heck, at the Strawberry Fire Department fundraiser all he [Ratliff] did was stand up and talk about how much he gave them.”

A GIF grant is not likely to be forgotten by the members of an organization receiving the grant. In addition, local governments and volunteer organizations are also likely to be a good source of campaign workers because these are people who are already active in their community.

Could GIF make the difference in a legislative race?  You bet! Consider how close Blaine Davis’ came to winning.  Davis only lost to the incumbent by 50 votes. There are a lot of fire firefighters in House District 60. If just 26 firefighters voted for the incumbent because of GIF funds, then GIF funds made the difference in the outcome in that race.

Gaining publicity and building voter gratitude.

Legislators doling out GIF grants is a big deal in many areas of the state. Local newspapers, especially in rural areas, love to report that their Representative or Senator got GIF for local communities and organizations.  Legislators are quick to get in the photograph when as poster size check is handed out.  Click on name for an examples of the publicity legislators get from “their GIF:

 Rep. Scott Baltz                      Rep James Ratliff           Sen. Stephanie Flowers

Rep. Sheilla Lampkin            Rep Jeff Wardlaw          Rep Douglas House

 

Some legislators send all or a portion of “their” GIF to colleges. It is good publicity too.  For example, the University of Arkansas made sure its supporters and alumni knew that thirteen legislators deserve recognition for sending GIF to the university for three projects in the combined amount of $3 million. See article: University receives increase in state funding monies from General Improvement Fund

Many people see these articles and think “Our legislator is working hard and knows how to bring home the bacon.”  No effort was actually needed. Legislative GIF is just a slush fund created to give every legislator a share, whether the legislator uses it for a good purpose or not.

If the local newspaper fails to report the story or an organization’s newsletter fails to publicize it, what does a legislator do?  The answer is easy – toot your own horn on social media.  That is what Rep. Ratliff did when he did not get the publicity he hoped for.  Here are a couple of examples from James Ratliff’s Facebook account:

June 4, 2014: “Had a busy day. Started by going to the women’s battered shelter in Highland this morning awarding them a grant of $1000 for fixing their plumbing.”

April 12, 2015: “The fire chief Stan Mayland thanked myself (Rep James Ratliff) for the grants that bought all new turnouts and equipment for all the firemen in Strawberry.”

It seem a bit odd for a Representative to need to put his own name in parentheses on his own Facebook account.

 

Are there reasons for giving legislators discretionary funds (other than election purposes)? Are there legitimate reasons to give legislators discretionary funds?  No, there is not. Excuses cited in the past include:

1. Legislative discretion over the money is needed in order to get money for projects in rural areas. Wrong. Sorry but if getting funds to rural areas is the goal there would be a lot easier and cheaper ways of doing it. First, it is not just rural legislators who have say over GIF funds. Second, no legislator is required to use the funds for a rural project or even within his or her own district.

2. Legislative discretion is needed because a legislator knows better than anyone which local project should get a GIF. Wrong again. Legislators sometime do not know the greatest needs in their district and even if they do they have no obligation to use GIF for the most needed projects. In exercising discretion over the money, the legislator’s goals sometimes conflict with the priorities and needs of municipal and county officials.In 2013, Senator Jeremy Hutchinson directed GIF money to a firework show.  I happen to like firework shows, but local governments didn’t fund the firework show because of a lack of funds for more important projects.“Saline County Judge Lanny Fite said he has a list of projects that need funding like repaving parking lots or buying new lighting. ”“I did not like the way it was being used, plain and simple,” Fite said. “Money is very tight; we don’t have a sales tax. This money is always good to help us do projects that the county cannot afford.” [i]Also in 2013, then Representative Andy Mayberry and some legislative friends sent $120,000 in GIF to fund a playground that is fully accessible to disabled children.  That is certainly a worthy cause! But it also seems to be an instance in which a state Representative single handily pushed a project onto the county despite the quorum court not having money to maintain a park or replace equipment in the future.  It was noted by a quorum court member that the county didn’t even have a parks department. Julie Mayberry, Rep. Andy Mayberry’s wife and now a state Representative, responded to criticism by the quorum court in 2013 by suggesting that the quorum court create a parks department.[ii]Could we handle needs without giving legislators an expensive reelection tool?

On the other hand, maybe we would miss those newspaper photos of legislators handing out poster sized checks and their Facebook self promotions. The state also has turn back formulas for sending state support to municipalities and counties.

Also consider that a significant portion of legislative GIF goes to fire departments.  Again, there is a funding formula for support of fire departments.  In addition, a fire department with a significant need could be overlooked merely because it is in a legislative district where the legislator prefers to give his GIF allotment to a college or perhaps want to use it for a fireworks show.

Consider that a significant portion of legislative GIF goes to colleges. We already have a funding formula for the colleges. The Department of Higher Education should have a good understanding of needs of Arkansas colleges.  And, under the current system there is no guarantee that the most important need will be addressed because a legislator with a college in his or her district could choose to spend his or her share on other types of projects.

Do we really have to give a legislator a “please-reelect me fund” in order to fund worthy projects.

 

[i] Display funding called to question, Arkansas Democrat Gazette, July 4,2014

[ii] Legislator’s letter eased funds for wife’s park project, Arkansas Democrat Gazette, Sept 3, 2013

 

HEALTHCARE FORUM GIVES ARKANSANS A HEADS UP

CENTERS FOR MEDICARE AND MEDICAID SERVICES SPECIAL TERMS AND CONDITIONS

For a complete copy of CMS Terms and Conditions see: http://www.conduitforaction.org/arkspecialtermsandconditions/

(Note: some words may have been mistyped in this document through conversion from pdf to text format to shorten)

NUMBER:     ll-W-00287/6

 TITLE:   Arkansas Health Care Independence Program (Private Option)

AWARDEE:  Arkansas Department of Human Services

I. PREFACE

The following are the Special Terms and Conditions (STCs) for the Arkansas Health Care Independence Program (Private Option) section 1115(a) Medicaid demonstration (hereinafter demonstration) to enable Arkansas (State) to operate this demonstration. The Centers for Medicare & Medicaid Services (CMS) has granted waivers of requirements under section 1902(a) of the Social Security Act (Act), and expenditure authorities authorizing federal matching of demonstration costs not otherwise matchable, which are separately enumerated. These STCs set forth in detail the nature, character, and extent of federal involvement in the demonstration and the State’s obligations to CMS during the life of the demonstration. The STCs are effective on the date of the signed approval. Enrollment activities for the new adult population will begin on October  1, 2013 for the Private Option qualified health plan (QHP) with eligibility effective January  1, 2014.  The demonstration will be statewide and is approved through  December  31, 2016.

The STCs have been arranged into the following subject areas:

 

  1. Preface
  2. Program Description And Objectives
  3. General Program Requirements
    1. Populations  Affected
    2. Private Option Premium Assistance Enrollment
      1. Premium Assistance Delivery System
        1. Benefits
        2. Cost Sharing
          1. Appeals
          2. General Reporting Requirements
            1. General Financial Requirements
              1. Monitoring Budget Neutrality
            2. Evaluation
              1. Monitoring
                1. Health Information Technology and Premium Assistance
        3. T-MSIS

 

  1. PROGRAM DESCRIPTION AND OBJECTIVES

 

Under the Private Option demonstration, the State will provide premium assistance, to support the purchase by beneficiaries eligible under the new adult group under the state plan of coverage from QHPs offered in the individual market through the Marketplace.  In Arkansas, individuals eligible for coverage under the new adult group are both (1) childless adults ages 19 through 64 with incomes at or below 133 percent of the federal poverty limit (FPL) or (2) parents and other caretakers between the ages of 19 through 64 with incomes between 17 percent and 133 percent of the FPL (collectively Private Option beneficiaries).  Arkansas expects approximately 200,000 beneficiaries to be enrolled into the Marketplace through this demonstration program.

 

Private Option beneficiaries will receive the State plan Alternative Benefit Plan (ABP) primarily through a QHP that they select and will have cost sharing obligations consistent with the State plan.

 

With this demonstration Arkansas proposes to further the objectives of Title XIX by:

  • Promoting continuity of coverage for individuals,
    • Improving access to providers,
      • Smoothing the “seams” across the continuum of coverage, and
      • Furthering quality improvement and delivery system reform initiatives.

 

Arkansas proposes that the demonstration will provide integrated coverage for low-income Arkansans, leveraging the efficiencies of the private market to improve continuity, access, and quality for Private Option beneficiaries.  The state proposes that the demonstration will also drive structural health care system reform and more competitive premium pricing for all individuals purchasing coverage through the Marketplace by doubling the size of the population enrolling in QHPs offered through the Marketplace.

 

The state proposes to demonstrate following key features:

 

Continuity of coverage and care -For households with members eligible for coverage under Title XIX and Marketplace coverage as well as those who have income fluctuations that cause their eligibility to change year-to-year, or multiple times throughout the year, the demonstration will create continuity of health plans available for selection as well as provider networks. Households may stay enrolled in the same plan regardless of whether their coverage is subsidized through Medicaid, or Advanced Payment Tax Credits/Cost Sharing Reductions (APTC/CSRs).

 

Support equalization of provider reimbursement and improve provider access – The demonstration will support equalization of provider reimbursement across payers, toward the end of expanding provider access and eliminating the need for providers to cross-subsidize. Arkansas Medicaid provides rates of reimbursement lower than Medicare or commercial payers, causing some providers to forego participation in the program and others to “cross subsidize” their Medicaid patients by charging more to private insurers.

 

(pages 3-4 omitted)

demonstration, the governor or chief executive officer of the State must submit to CMS either a demonstration extension request or a transition and phase-out plan consistent with the requirements of STC 9.

 

  1. Compliance with Transparency Requirements at 42 CFR §431.412.

 

  1. As part  of  the demonstration  extension  requests  the State must  provide  documentation  of compliance  with the transparency  requirements  42 CFR  §431.412 a:tJ.d the public notice and tribal  consultation  requirements  outlined  in STC  15.

 

  1. Demonstration Phase Out.  The State may only suspend or terminate this demonstration in whole, or in part, consistent with the following requirements.

 

  1. Notification of Suspension or Termination: The State must promptly notify CMS in writing of the reason(s) for the suspension or termination, together with the effective date and a transition and phase-out plan.  The State must submit its notification letter and a draft plan to CMS no less than six (6) months before the effective date of the demonstration’s suspension or termination.  Prior to submitting the draft plan to CMS,  the State must publish on its website the draft transition and phase-out plan for a 30-day public comment period. In addition, the State must conduct tribal consultation in

accordance with its approved tribal consultation State Plan Amendment. Once the 30-day public comment period has ended, the State must provide a summary of each public comment received the State’s response to the comment and how the State incorporated the received comment into the revised plan.

 

  1. The State must obtain CMS approval of the transition and phase-out plan prior to the implementation of the phase-out activities. Implementation of activities must be no sooner than 14 days after CMS approval of the plan.

 

  1. Transition  and Phase-out Plan Requirements: The State must include, at a minimum, in its plan the process by which it will notify affected beneficiaries, the content of said notices (including information on the beneficiary’s appeal rights), the process by which the State will conduct administrative reviews of Medicaid eligibility prior to the termination of the program for the affected beneficiaries, and ensure ongoing coverage for those beneficiaries  determined eligible, as well as any community outreach activities including community resources that are available.
  2. Phase-out Procedures: The State must comply with all notice requirements found in 42 CFR §431.206, §431.210, and §431.213. In addition, the State must assure all appeal and

 

  • hearing rights afforded to demonstration participants as outlined in 42 CFR §431.220 and

§431.221. If a demonstration participant requests a hearing before the date of action, the State must maintain benefits as required in 42 CFR §431.230. In addition, the State must conduct administrative renewals for all affected beneficiaries in order to determine if they qualify for Medicaid eligibility under a different eligibility category.  42 CFR Section 435.916.

  1. Exemption from Public Notice Procedures 42.CFR Section 431.416(g).  CMS may expedite the federal and State public notice requirements in the event it determines that the objectives of title XIX and XXI would be served or under circumstances described in 42 CFR Section 431.416(g).

f.    Federal Financial Participation (FFP): If the project is terminated or any relevant waivers suspended by the State, FFP shall be limited to normal closeout costs associated with terminating the demonstration including services and administrative costs of disenrolling participants.

 

10.  Post Award Forum.  Within six months of the demonstration’s implementation,  and annually thereafter, the State will afford the public with an opportunity to provide meaningful comment on the progress of the demonstration.  At least 30 days prior to the date of the planned public forum, the state must publish the date, time and location of the forum in a prominent location on its website.  The state can either use its Medical Care Advisory Committee, or another meeting that is open to the public and where an interested party can learn about the progress of the demonstration to meet the requirements of this STC.  The state must include a summary of the comments in the quarterly report as specified in STC 46 associated with the quarter in which the forum was held.  The State must also include the summary in its annual report as required in STC 48.

 

11.  Federal Financial Participation (FFP).  If the project is terminated or any relevant waivers suspended by the state, FFP shall be limited to normal closeout costs associated with terminating the demonstration including services and administrative costs of disenrolling enrollees.

 

  1. Expiring Demonstration Authority. For demonstration authority that expires prior to the demonstration’s expiration date, the state must submit a transition plan to CMS no later than six months prior to the applicable demonstration authority’s’ expiration date, consistent with the following requirements:

 

  1. Expiration Requirements.  The state must include, at a minimum, in its demonstration expiration plan the process by which it will notify affected beneficiaries, the content of said notices (including information on the beneficiary’s appeal rights), the process by which the State will conduct administrative reviews of Medicaid eligibility for the affected beneficiaries, and ensure ongoing coverage for eligible individuals, as well as any community outreach activities.

 

(Pages 7-17 omitted)

  1. Administrative Costs.  Administrative  costs will not be included in the budget neutrality limit, but the State must separately track and report additional administrative costs that are directly attributable to the demonstration, using Forms CMS-64.10 Waiver and/or 64.10P Waiver, with waiver name Local Administration Costs (“ADM”).

 

  1. Claiming Period.  All claims for expenditures subject to the budget neutrality limit (including any cost settlements) must be made within 2 years after the calendar quarter in which the State made the expenditures.  Furthermore, all claims for services during the demonstration period (including any cost settlements) must be made within 2 years after the conclusion or termination of the demonstration.  During the latter 2-year period, the State must continue to identify separately net expenditures related to dates of service during the operation of the section 1115 demonstration on the Form CMS-64 and Form CMS-21 in order to properly account for these expenditures in determining budget neutrality.

 

  1. Reporting Member Months. The following describes the reporting of member months for demonstration  populations:

 

  1. For the purpose of calculating the budget neutrality expenditure cap and for other purposes, the State must provide to CMS, as part of the quarterly report required under STC 46, the actual number of eligible member months for the demonstration populations defined in STC 17. The State must submit a statement accompanying the quarterly report, which certifies the accuracy of this information.

 

To permit full recognition of “in-process” eligibility, reported counts of member months may be subject to revisions after the end of each quarter. Member month counts may be revised retrospectively as needed.

 

  1. The term “eligible member months” refers to the number of months in which persons are eligible to receive services.  For example, a person who is eligible for three months contributes three eligible member months to the total.  Two individuals who are eligible for two months each contribute two eligible member months to the total, for a total of four eligible member months.

 

  1. Standard Medicaid  Funding Process.   The standard Medicaid  funding process  must be used during the demonstration.  The State must estimate matchable demonstration

expenditures (total computable and federal share) subject to the budget neutrality expenditure

cap and separately report these expenditures by quarter for each federal fiscal year on the Form CMS-37 for both the Medical Assistance Payments (MAP) and State and Local Administration Costs (ADM).  CMS will make federal funds available based upon the State’s estimate, as approved by CMS.  Within 30 days after the end of each quarter, the State must submit the Form CMS-64 quarterly Medicaid expenditure report, showing Medicaid expenditures made in the quarter just ended.  The CMS will reconcile expenditures reported on the Form CMS-64 quarterly with federal funding previously made available to the State, and include the reconciling adjustment in the finalization of the grant award to the State.