Hutchinson says he's preparing 2 budgets for year

Arkansas Gov. Asa Hutchinson said Friday he's preparing two budget proposals for the coming year — one with the state's hybrid Medicaid expansion and one without — and warns the state faces cuts without the expanded coverage.

In an interview with The Associated Press as he wraps up his first year in office, the Republican governor called the debate over the future of the expansion a "significant challenge." Wednesday marks a year since the former congressman and Homeland Security official was sworn in.

Hutchinson touted his accomplishments such as a $102 million tax cut that took effect in 2016, but said he still faces unfinished work on the Medicaid expansion's future and ideas to increase highway funding. He also said he'll personally push next year to end the state's practice of commemorating Martin Luther King Jr. and Confederate Gen. Robert E. Lee on the same day.

Hutchinson said Arkansas faces a much tighter budget picture if lawmakers don't keep its hybrid Medicaid expansion, which provides coverage to more than 200,000 people. The "private option" uses federal funds to purchase private insurance for low-income residents, and was crafted as an alternative to expanding Medicaid under the federal health law.

Hutchinson has proposed renaming the program "Arkansas Works" and adding new limits on its eligibility and benefits. He's meeting with federal officials Feb. 1 about his proposed changes and plans a special session about the program's future.

"I'm having to look at two possible budget scenarios for the fiscal session" that begins in April, Hutchinson said. "One of them is what it looks like with the Arkansas Works initiative and the other one is if that's not approved and we have that $100 million plus gap in the state budget, where do we fill that and what do we have to cut?"

Hutchinson said he believes he kept his campaign promises in his first year, including his winning an income tax cut and his push to require public high schools to offer computer science courses. The 1 percent income tax cut for those making between $22,000 and $75,000 took effect Jan. 1 and will benefit 600,000 residents.

"That's how any public official should be measured, and if you start with that you build public confidence and trust, and we've done exactly what we said we would do," Hutchinson said.

Hutchinson said he plans to continue traveling nationally and abroad to promote the state as a good place to do business, including a trip to New York next week. That trip will include a visit to the New York Stock Exchange, where he'll ring the opening bell Monday.

Hutchinson led trade missions to Cuba, Europe and Asia last year, and said he expects more.

"I told (the state economic development commission) to plan on two trade missions a year," he said.

Hutchinson said he'll take an active role next year in rallying support for removing Lee from the King holiday. Arkansas is one of three states to jointly celebrate the black civil rights icon and a white Confederate general on the third Monday in January, and a proposal to end that practice failed repeatedly before a House committee last year.

Hutchinson said earlier this week he wanted to see lawmakers try again in 2017. He said the change is the "right thing to do" and not necessarily an economic development issue. Supporters of the move have said the combined holiday hurts Arkansas' efforts to lure businesses.

"I don't see it as an economic issue," he said. "I see it as what is a proper recognition of history and the contributions of Martin Luther King. I want those strengthened and not diminished and I think we can do that by having a separate, distinct holiday."



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