What a tangled web he weaves…..
In the Special Session of the General Assembly to begin Monday, May 1, Governor Asa Hutchinson wants the legislature to transfer $105 million from the tobacco settlement proceeds the state received that are now in a TRUST FUND (Arkansas Healthy Century Trust Fund) to the Long Term Reserve Fund. He SAYS the transfer is needed to protect Arkansas’ bond rating.
Sounds okay until you realize there is nothing long term about the Long Term Reserve Fund. It is the Governor’s slush fund to use for anything he wants. Until July 1, 2016 the fund was known as the Rainy Day Fund. The renaming of the fund was hidden down in Section 15 of a bill concerning highway funding (Act 1 of the 3rd Ex. Sess. 2016). The change only renamed the fund and did not change its function.
Under the Long Term Care Reserve Fund the Governor can spend the money for anything he wants as long as he gets approval by a majority vote in one legislative committee, the Legislative Council. Bypassing the full legislature this way is far easier than getting approval to spend the money through an appropriation, which requires approval of three-fourths of the membership of both houses.
So, how has the Governor described this fund? According to the Arkansas Democrat-Gazette, “Hutchinson said he uses the rainy-day fund [now Long Term Reserve Fund] for emergencies, and for special needs and his priorities that aren’t included in the state’s … general revenue budget.”[i] (emphasis added). In other words, he spends it for what he decides is an emergency, what he decides is a special need, and his priorities.
The Governor wasn’t kidding when he said he uses it for HIS priorities! In 2015, he used the fund to reverse a decision of the legislature. Less than three months after the legislature adjourned, the Governor reversed the legislature’s decision rejecting the Division of Agriculture’s request for an additional $3.5 million. In July 2015, he gave the division $3 million in Rainy Day Funds.[ii] His request for funding only had to be approved by a legislative committee and not by the full legislature.
In November 2016, instead of the full General Assembly being called to determine how much of your taxes should be given to the Arkansas Medical Marijuana Commission, the Governor bypassed the appropriation process by having the Legislative Council rubber stamp a release of $3 million to the Commission. Again, the full legislature was bypassed.
Governor Hutchinson has made no secret he does not like the Constitution’s requirement of a three-fourth’s vote in each house of the legislature to pass a spending bill. In 2016, according to the Governor’s then chief of staff, Hutchinson’s chief of staff, Michael Lamoureux, the Governor has his staff researching if there was a way around the three-fourth’s vote requirement. The Governor was trying to fund his version of Obamacare Medicaid Expansion and he lacked the votes.[iii] Eventually, he relied on a trick play by putting a prohibition in the appropriation bill and then vetoing the prohibition.
Just a few days ago Governor Hutchinson announce a $70 million cut in his $5.33 BILLION General Revenue Budget. Note that he said the cut wouldn’t affect services. By robbing the Arkansas Healthy Century Trust Fund, if he wished he could fully fund even the least needed parts of the General Revenue budget and still have another $35 million of extra slush funds to play with.
The $105 million robbed from the trust fund might not last long under Governor Hutchinson. In his first eighteen months, he spent more from the Rainy Day Fund (now Long Term Reserve Fund) than former Governor Mike Beebe (D) did in the previous six years of the fund.
Conduit for Action has been wondering how Governor Hutchinson would replenish his slush fund since he did not include an appropriation for it during the Regular Session. Now we know.
[i] Rainy-day’s $122,084 shifted to Parole Board, Arkansas Democrat Gazette, 02/20/2016
[ii] State panel OKs $9.6M allocation governor sought, Arkansas Democrat Gazette, 07/15/2015