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Arkansas Legislators Eye Tax Hike for Medicaid

November 10, 1992

LITTLE ROCK, Ark. (AP) _ Arkansas legislators are warning that a state tax increase may be needed to avoid deep Medicaid cuts, but Bill Clinton and his apparent successor do not agree on who should make the call.

The president-elect says a final decision on seeking a tax increase should be up to Lt. Gov. Jim Guy Tucker.

″I don’t want to rule out anything. It ultimately is going to have to be his call, not mine,″ Clinton said Monday.

″I am not the governor,″ a frustrated Tucker said Tuesday. ″I can make suggestions, (but) I am constitutionally unable to make decisions. This is an issue that I expect to have to deal with. Exactly how I deal with it depends a lot on when Gov. Clinton resigns, and I don’t know when that will be.″

Clinton has not said when he will resign the $35,000-a-year job, although he has indicated he might wait until courts resolve a constitutional question about who succeeds him. Tucker, a Democrat, said Monday the two had discussed a timetable for Clinton’s resignation, but no specifics were released.

Clinton told Tucker last month that he would resign immediately after the election, according to Tucker. ″I assume what he said, he’ll do,″ Tucker said Tuesday.

Lawmakers said a tax increase may be necessary to avoid reductions that could force thousands of adults out of nursing homes and cut off medication subsidies to 45,000 others.

Clinton administration officials had said before the election that cuts might be needed, but Monday was the first time legislators talked openly about a possible tax increase.

By Tuesday, lawmakers already had begun backpedaling from a special session and the prospect of a general tax increase. Sen. Jay Bradford, D-Pine Bluff, said his telephone rang off the hook Tuesday with people complaining about the prospect of a tax increase.

″We may just have to take the hard-line approach″ and made the cuts, he said.

Kenny Whitlock, head of the state Medicaid program, said the program’s budget was expected to be $70 million to $120 million in the red by the end of June. To get enough federal matching money to cover a $120 million shortfall, the state would have to raise $30 million.

The Legislature may need to convene in special session before the end of the year, said Democratic state Rep. Jodie Mahony and other lawmakers. Bradford, like Mahony a Clinton ally, said the president-elect should remain as governor to convene the special session and sign a tax increase.

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