LITTLE ROCK — Gov. Mike Beebe on Wednesday called a special session, to begin Thursday, on a plan to stabilize health insurance premiums for teachers and other public school employees.
Beebe said legislative leaders informed him they have a enough votes in the House and Senate to pass a series of bills ranging from stopgap legislation to hold down rate increases next year to a comprehensive plan to stabilize the public school employees’ health insurance system.
The session is set to begin at 3 p.m. Thursday.
“If everybody agrees and it goes smoothly it could go Thursday, Friday and Saturday,” Beebe said.
The governor’s call for a special session includes five bills. Four will address the rising health insurance costs and one, which is backed by the governor and will be considered separately, would phase out the excess property tax revenue some school districts have kept and redirect those funds to the state.
The proposals to address the teacher insurance crisis includes both a short-term and long-term solution. The short-term proposal calls for using $43 million from the state surplus to avert a 50 percent rise in health insurance rates set to go into effect Jan. 1. Another $36 million a year would hold down future increases.
“I would not be issuing this call if we hadn’t already seen extraordinary bipartisan efforts to help our teachers and other public-school employees in Arkansas,” Beebe said Wednesday. “After dozens of meetings with legislators, district officials, teachers and other involved parties, we have a solution that may not please every individual group but will help alleviate the spike in insurance rates and shore up this insurance program.”
The governor told reporters earlier Wednesday that House leaders had secured 77 votes, two in excess of the 75 needed for a three-fourths majority to pass the appropriations. Senate leaders, who Tuesday were a few votes shy of a supermajority, notified the governor early Wednesday they had secured 29 votes, two more than the three-fourths majority needed in that chamber.
Sen. Johnny Key, R-Mountain Home, who is chairman of the Senate Eduction Committee, said Wednesday some members finally agreed to support the plan to address the rising teacher insurance costs when more emphasis was placed a proposal to create a task force to study long-term structural reforms of the public employees insurance program.
Several senators wanted assurances that the task force would be proactive, and not fall apart or have its recommendations sit on a shelf, Key said.
“The legislative intent is, we’re not going to have to continue to bail out the system,” he told reporters. “Reforms are going to have to take place, and if they don’t take place this funding stream that we’re putting in there we’re going to pull those back down the road (if we don’t adopt) real reforms.”
The task force would be required to issue a report and make recommendations by June 2014, to be reviewed by legislative committees and all budget issues addressed in time for consideration in the 2015 legislative session. Key said the panel would conduct a comprehensive review of the state and public school employee insurance systems, including governance and structure, board structure and funding options.
Separately, lawmakers will consider the phase-out of excess property tax revenue held by some districts. Beebe said the measure would address a 2012 Arkansas Supreme Court ruling and keep the state’s school funding in line with the intent of provisions that ended the long-running Lake View school funding case.
As for addressing the school employees insurance crisis, Beebe set legislative consensus on both short-term and long-term solutions as a condition for calling a special session.
Legislative leaders quickly forged agreement on using surplus funds for the short-term fix.
The long-term plan took more time. It would redirect $36 million annually to the school employees’ health insurance system — $10 million from general revenue, $16 million from the school facilities improvement program and $10 million from state funding for teacher professional development.
Another $18 million would be passed on to school employees in the form of premiums, though that amount could be reduced as a result of reforms to be recommended by the task force.
Some lawmakers said Wednesday they support the overall plan but don’t like tapping funding for professional development to pay for health insurance.
“I think this is a move in the wrong direction,” said Sen. Uvalde Lindsey, D-Fayetteville. “Currently there is a push for implementation of Common Core, implementation of strategies for better outcomes for students … all of those sorts of things seem to me that now is not the time to reduce the hours of professional development, that we need more.
“And so I quarrel with that reduction, but I would grudgingly hold my nose and probably vote for it.”
The health insurance rates for school employees have been rising for several years because of a lack of funding from the state and local school districts. Also, a $10 million catastrophic claims fund was wiped out by five claims in 2012 and 2013 that each totaled more than $1 million. The Legislature this year appropriated $8 million for the program.
In September, Bob Alexander, director of the Employee Benefits Division, told a legislative committee it would take $53 million in new money to keep premium rates at current levels next year.
As lawmakers considered ways to hold down premium increases, officials earlier this month pushed back the enrollment period for employees covered by the health insurance plan from Oct. 1 to Nov. 1. The health insurance system told the governor it needed some direction by Tuesday so that it could begin preparing material for the sign-up period. The board met Tuesday and voted to begin the process of printing up materials based on the proposal now being considered by lawmakers.