UPDATE: Special session called on school employee insurance | Arkansas Blog

UPDATE: Special session called on school employee insurance

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UPDATE: A special legislative session has been called for 3 p.m. tomorrow to consider bills to reduce the impact of health insurance rate increases for public school employees.

That means Gov. Mike Beebe found the two additional Senate votes he needed to approve the deal. It requires 27 votes for the appropriation bill, but not for other related legislation. Beebe says he has 29, plus 77 votes in the House, a two-vote margin. 

Spokesman Matt DeCample
said the bill to restore the law to its original intent on a base 25-mill charge to all school districts for the state funding formula remains part of the package. This will recoup some money for insurance. This had fired up a handful of teabaggers who overlooked the basic unfairness of a windfall for eight property rich districts who wanted to make a convoluted case about redistribution of wealth. See Pulaski County tax revenue if you want to see wealth redistribution writ large. The law on the millage charge, or URT as it's known, requires only a majority vote. Rep. Bruce Westerman and other residents of the eight  small school districts who enjoy a windfall and a rock bottom millage rate will whine piteously from the well. They are lucky to get a phase-out of the unfair windfall. Residents of other districts who pay the full fare weren't all in favor of that.

The proposal spends $43 million from surplus in the year beginning Jan. 1 to reduce the rate increase.


HERE'S WHAT I WROTE EARLIER:

MAKE 'EM PAY: Sen. Cecile Bledsoe, herself once a beneficiary of lower cost state employee insurance, thinks public school employees should feel more of the sting of cost increases.
  • MAKE 'EM PAY: Sen. Cecile Bledsoe, herself once a beneficiary of lower cost state employee insurance, thinks public school employees should feel more of the sting of cost increases.
A senator told me last night he remains hopeful that two more votes can be picked up to pass a group of bills aimed at lowering the cost of public school employee health insurance.

Gov. Mike Beebe has said he has 25, needing 27 for the appropriation bill in the package, but not for other elements. The 35-member Senate is currently shy a member because of Paul Bookout's resignation.

So nine senators stand in the way of a bailout for tens of thousands of public school employees. Who are they? Be sure that will be known if the deal doesn't go through today, which all are saying now is the deadline.

A variety of issues are at work:

1) Some don't want to devote $43 million of surplus to the bailout, preferring a smaller subsidy. Sen. Cecile Bledsoe, for example, told the Arkansas Democrat-Gazette she'd prefer more pain for teachers — a 16 percent rate increase rather than the 10 percent increase under the bailout, through spending $36 million of surplus. Easy to say for a doctor's wife who for years enjoyed the much more heavily subsidized state employee insurance plan. She's now Medicare-eligible. (Shades of Obamacare: Bledsoe stuck with the high-value public employee plan because her physician husband couldn't get private coverage on account of a pre-existing medical condition. Still she opposed Obamacare.)

2) Some don't think the plan is a long-term solution. True. Time simply isn't available for that. But steps are taken in that direction, beginning with an end to no-deductible policies. If pain is good, in the eyes of the Cecile Bledsoes of the world, this ought to be a step in the right direction.

3) Some object to restoring the intended form of the state school finance formula, in which all of the 25-mill base charge to all school districts goes to the state. A recent court interpretation said eight property-rich tiny school districts could keep a windfall of revenue from the base charge above the state's annual per-pupil foundation support of more than $6,000 per student. That was never the intention. The intention was a 25-mill charge on everyone, rich and poor. A district with a giant power plant shouldn't get a windfall unavailable to poor districts that  make extraordinary efforts by approving millages far beyond 25 mills. One mill in a rich school district would produce far more money at very little pain to small taxpayers. The Bob Ballingers of the world (he's one of the loudest critics of the proper historic interpretation of the 25-mill charge) want an unfair windfall. The Supreme Court has already said the base charge is a state tax, not a local levy. Will eight tiny school districts hold tens of thousands of school employees hostage? It would appear so. The Tea Party rides again.

Funny story for the 'baggers. There are some legislators who won't go along with the deal UNLESS fairness on the base charge is restored by a statute correcting the court decision.

FOR YOUR INFORMATION: Benji Hardy at Legislative Digest has written a thorough explanation of the URT issue.

ON THE JUMP: The governor's announcement of the agenda.

NEWS RELEASE

Governor Mike Beebe issued a call Wednesday to bring the Arkansas General Assembly into session to address the large health insurance rate increase facing the Public School Employee Plan. The special session will begin Thursday afternoon at 3:00 p.m., and should conclude by the end of the day on Saturday.

"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," Governor Beebe said. "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 call includes bills that will, if approved:

- Provide $43 million in one-time surplus funds to reduce the 2014 rate increase from 50% to 10%.

- Redirect future savings from the Educational Facilities Partnership Fund to provide long-term relief to the plan.

- Modify the requirements for Teacher Professional Development to provide long-term relief to the plan.

- Establish a task force to study and revise the Public School Employees Plan for future sustainability.

- Clarify the distribution of State revenue generated by the Uniform Rate of Tax, as advised by the Arkansas Supreme Court, and direct some of that revenue to the Educational Facilities Partnership Fund.


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