LITTLE ROCK — The House and Senate gave final passage Wednesday to a $5 billion state budget bill, sending it to the governor and completing the regular business of Arkansas’ third fiscal session — although they may have one more issue to consider.
Gov. Mike Beebe told reporters he is considering vetoing a provision added to a budget bill stating that the sand used in oil and gas drilling is exempt from the state sales tax.
“If you want to do a bill other than a budget bill, a substantive bill, in a fiscal session, you’re supposed to go get a resolution and two-thirds of both bodies approve the resolution to take up a substantive (bill),” Beebe said.
The governor said that when voters approved fiscal sessions, they did not intend for legislators to be able to pass substantive legislation during those session by simply amending budget bills.
“I think it’s clearly unconstitutional. The question is, am I going to do something about it or am I going to let the court do something,” he said, adding there is “no question” the law will be challenged in court if he does not exercise his line-item veto power against it.
Sen. Jonathan Dismang, R-Beebe, who proposed the amendment that was added to House Bill 1048 in the Special Language Committee, said Wednesday the amendment merely clarifies that the sand used by oil and gas drillers is an item of manufacturing equipment and as such falls under Arkansas’ tax exemption for manufacturers’ equipment.
“It’s essentially well casing,” he said.
As for Beebe’s comment that the provision would be challenged in court, Dismang said, “I’m not sure who would bring the action.”
Both chambers of the Legislature recessed Wednesday and are scheduled to convene again next Wednesday for the official end of the session, known as sine die. Lawmakers have until then to correct mistakes in bills and attempt to overturn any vetoes by the governor.
Beebe and legislative leaders praised lawmakers for the accomplishments of the session, including passage of a Department of Human Services budget that includes an appropriation of federal funding for the private option, the state’s program that uses federal Medicaid money to subsidize private insurance for low-income Arkansans.
“I continue to brag on their bipartisan working relationship. They’ve done a good job,” Beebe said.
House Speaker Davy Carter, R-Cabot, said that since he has been speaker, legislators have passed one of the largest tax-cut packages in state history, adequately funded public schools, aggressively dealt with health care and held growth in state spending down to 2 percent.
“With the … divisive things going on nationally, to be able to do what we did, working together, Republicans, Democrats, I think is remarkable. I’m very proud of that,” he said.
Senate President Pro Tem Michael Lamoureux, R-Russellville, said he was satisfied with the session and pleased to see funding for the private option renewed, although he was concerned about the amount of policy debate that took place during what was supposed to be a budget-only session.
“I think there was probably more of that than there should have been,” he said.
Carter said, “I do worry about, during the fiscal session, during the budget process, (getting) into substantive matters. I think that’s a serious issue that everybody needs to be concerned with. We got really close to having a real standoff here.”
The private option funding passed in one vote in the Senate, but it failed in the House four times before passing on the fifth vote.
Carter also said he had asked Rep. John Burris, R-Harrison, chairman of the House Public Health, Welfare and Labor Committee, to appoint a bipartisan subcommittee to study what would happen if the private option were to end.
“I think that’s just good business to do, to make sure the state’s prepared for that. I hope that doesn’t happen,” Carter said, adding that he believes in the program.
DHS said Wednesday that 207,967 people have applied for the private option and that 137,809 have been found eligible. Of those, 97,934 have completed the process of enrolling in private plans and 13,410 have been determined to be better served by traditional Medicaid.
The state budget bill sent to Beebe on Wednesday largely mirrors the proposed budget he released in January, including a $65 million increase in public school funding, a $3.1 million increase for prisons, a $7 million increase in reimbursement to county jails for housing state inmates and $5.2 million for a 1 percent cost-of-living adjustment for state employees.
Lawmakers also gave final passage Wednesday to nearly $22 million in spending from the state’s $126 million budget surplus, to go to prisons, county jail reimbursement, school broadband, grants for charter school facilities and the Department of Health’s breast care program.
The session also saw passage of one non-budget bill. The measure, now Act 210 of 2104, allows the governor not to call a special election to fill a vacancy in the lieutenant governor’s office if the vacancy occurs within 10 months of a general election in which the office would be filled.
Legislators passed the measure to avoid the necessity of a special election to replace Mark Darr before the November general election. The former Republican lieutenant governor resigned Feb. 1 after the state Ethics Commission fined him $11,000 for misuse of campaign contributions and taxpayer money.