July 21: Arkansas Legislative Council transcript

Arkansas Legislative Council

July 21, 2022

Wardlaw I call the Arkansas Legislative Council to order. Real quick, I’m going to recognize my co-chair.

Rice Thank you, Mr. Chair. I’d like to welcome Martha Hill with Mitchell Williams, clerks and interns here today with the Arkansas Commitment Program summer interns. We have, I think, four here. So if you would stand up, let’s give them a round of applause this morning. Thank you all for attending.

Wardlaw So with that, first things first. Representative Ladyman, we’ll recognize you for the opening prayer.

Ladyman Lord, we, we thank you for our state. Lord, thank you for allowing us to live in this wonderful state. Today I ask that you would give us wisdom in the decisions that we make, that it might be the best decision for all Arkansans. Thank you again for the things that you do, the life that we have. I ask these things in Jesus Christ, Amen.

Wardlaw Amen. Senator Elliott, you have a– yes, ma’am. You’re recognized.

Elliott Thank you, Mr. Chair. I just want to take the opportunity, because we don’t see them very much, to welcome our teachers here today and support personnel. And, and we don’t, we don’t get the opportunity to say thank you very much and certainly not as a collective. And I know you’re about to go back to doing what you did so much all during the pandemic. And when we get the opportunity, I want to say thanks to everybody who make, makes our schools run and that’s teachers, all educators, including support personnel. So thank you all for being here today.

Wardlaw Thank you, Senator. And also, thank you, teachers, for everything you guys do. With that, I need a motion for the minutes from June 17. Okay. I have motion and a second. All those in favor, say aye. All opposed. Ayes have it. Minutes have passed. With that, Mr. Kevin Anderson with the revenue report.

Anderson Mr. Chairman. Thank you, Mr. Chairman. Kevin Anderson, Bureau of Legislative Research. We’re looking at item D. This is the Arkansas Revenue Report for June. I know there’s a lot on the agenda, so here’s a high level summary. [00:03:52]When you compare fiscal year 2022 with general revenue collections to fiscal year 2021, you’ll see gross general revenue collections end of year increased 652 million or 8% above the 8 billion last year. Net general revenues– those are revenues available for distribution– increased 38.4 million or 5.2% from the $740.6 million available for distribution in June of 2021. [28.7s] You’ll see at the bottom of page 1, a 9.2% increase for net available for distribution. And Mr. Chairman, on page 2, you’ll see the deviation of the collections from forecast. In June, we were $154.7 million above forecast. That forecast included a surplus of $1.7 billion. So when you add those two together, that got us to the $1.6 you’ve been hearing about. [00:04:50]And after all of the deductions, we have a $1.3 billion surplus. [4.7s] Mr. Chairman, I’m happy to take, try to take any questions.

Wardlaw We have a couple of questions. Senator Chesterfield, you’re recognized. Okay. Senator Hendren, are you pushing her buttons?

Hendren No, I was– I mean, I’ve been accused of it before. Thank you, Mr. Chairman. So a couple of questions. First one is, when I look at the general revenues, I see the increase that you mentioned of about $600 million. So where’s the other billion that we’re talking about in this $1.6 billion, basically, in terms coming from?

Anderson That, that’s our total general revenue that we have collected above what’s in RSA, above what is distributed in RSA. The collections that– the increase has been in sales tax and income tax. That’s where all our increases came from.

Hendren Okay, but I guess what I’m trying to– [00:05:56]I know we’re going to talk later about some one-time money from the federal dollars that came down for COVID relief and so on. That’s not, any of that, reflected in here. All of this is potentially recurring dollars, correct? [10.3s]

Anderson [00:06:07]Yes, sir. Notwithstanding any changes to our income tax collections that are being discussed for the special session. Yes, they are recurring dollars. [9.2s]

Hendren Yeah. Okay. I appreciate that. And then on page 3, the other number that I got a question about, and I know it was a hard year for everybody. But liquor permits went from $969 million to $1.6 billion. Was there some increase in the fees or why is that up 65%?

Anderson I’ll have to research that. I don’t have an answer for you. People drinking more during COVID?

Hendren I guess so. Okay. All right. Thank you.

Wardlaw Representative Meeks, you’re recognized.

Meeks Thank you, Mr. Chairman.

Wardlaw Let’s keep order in the room please.

Meeks I’ll ask you to put on your crystal ball here a little bit, Mr. Anderson. [00:07:11]The record surpluses that we’ve been having month over month, are those surpluses expected to continue or– as long as inflation does? Or will we start to see the these huge surpluses begin to wane and level back off closer to what our budget expectations are? [20.5s]

Anderson [00:07:33]Well. One thing that will affect it is if we do make changes during a special session to the income tax collections. Obviously, that’s a given. [6.7s]

Meeks [00:07:39]Sure. [0.0s]

Anderson [00:07:41]Most of the experts that I read are saying, they’re talking about a recession within two years. And that would obviously affect this. [7.2s]

Meeks [00:07:49]So if that recession does come to fruition, as everyone expects, what will that do to the surpluses that we’re seeing now? Will that get us closer back to budget or will we start actually being below forecast? [11.4s] Again, I’m asking you to speculate here I understand.

Anderson We have. It’s obvious we have a lot of room, the difference between collections and what we have allocated in revenue stabilization. [00:08:13]If you have a 4% growth to 5% growth in revenue stabilization, and we have a, we have a big hit from recession, you know, we have that $1.6 billion wiggle room in there. Yes, sir. And that’s, that’s part of the reason I think a lot of people feel like we can absorb moving forward with these income tax reductions. [21.8s]

Meeks Thank you. Thank you, Mr. Chair.

Wardlaw Senator Elliott, you’re recognized.

Elliott Thank you. Your mention of liquor just made me think about COVID and the money that people, people got, the COVID money, and they spent it. They paid taxes when they spent that money, too, I assume, did they not?

Anderson Yes. Yes, ma’am. And obviously, that is reflected in the purchases that they’re making with that money. Generates these–

Elliott Yes. And part of the reason we’re here, is, is money we got from the federal government that was spent at the local level, local and state level.

Anderson Yes, ma’am.

Elliott And as we move forward and we do have the $1.6 billion that you mentioned, it is a practice historically that we make decisions over the years, over the years in real time, per– and we pay attention to the Revenue Stabilization Act, but the legislature has to determine priorities.

Anderson Yes.

Elliott Does it not?

Anderson Yes, ma’am.

Elliott All right. Thank you.

Wardlaw Representative Wooten, you’re recognized.

Wooten Thank you, Mr. Chairman. Mr. Anderson, do you have any number as to how much inflation since January has contributed to the surplus and a dollar amount relative to what COVID, perhaps, funding has contributed to the end of the surplus?

Anderson Representative Wooten, I’m sorry. I haven’t broken anything down like that to look at the effect of COVID in percentages. That’s something I could definitely do for you though, sir. I don’t have any of that.

Wooten Okay. Thank you. Thank you, Mr. Chairman.

Wardlaw Thank you. Seeing no further discussion, thank you, Mr. Anderson, for the report. With that, we’ll move on to my co-chair, Senator Rice, for the executive subcommittee report.

Rice Thank you, Mr. Chair. Members, on June 24, the executive subcommittee exercised its statutory authority to approve emergency rules in writing for the Department of Agriculture regarding avian influenza. And that review and approval was reported to all ALC members. The subcommittee met on Wednesday, July 20, and reviewed and approved three emergency rules for DHS, AEDC and DFA Office of Intergovernmental Affairs. Approval of the emergency rules was reported to all 8 members of ALC, and the review and approval of those emergency rules will be effective upon adjournment of today’s ALC meeting. In addition, the subcommittee heard from the Segal Group regarding its proposal in response to the Employee Health Benefits Actuarial Consulting Service RFP that was issued by the Bureau in May. The subcommittee authorized the Bureau to enter into negotiations with Segal for a contract to provide the actuarial services and that the contract be brought to the ALC policymaking subcommittee at its August meeting. Mr. Chair, I move for adoption of the report.

Wardlaw It’s a proper motion. Do I have a second? I have a second. All those in favor, say aye. All opposed. Ayes have it. The report is adopted. With that, we’ll move on to Administrative Rules. Senator Hammer, you’re recognized.

Hammer Thank you, Mr. Chair. The Administrative Rules Subcommittee met on Wednesday, July 20. The subcommittee adopted reports in executive subcommittee concerning its approval of emergency rules. The subcommittee received agency updates on outstanding rulemaking pursuant to Act 595 of 2021. Following a motion by Representative Wardlaw, one update by the Department of Transformation and Shared Services was referred to Legislative Council in September. However, it is my understanding that Representative Wardlaw has clarified that he is okay with the update going to Administrative Rules Subcommittee. The Subcommittee filed the July report, or the July monthly written updates pursuant to Act 595. The subcommittee also reviewed agency rules recommending an expedited process for occupational licensing pursuant to Act 135 of 2021. All rules were reviewed and approved. I move adoption to the report, Mr. Chairman.

Wardlaw That’s a proper motion. Do I have a second? I have a second. Senator English. All those in favor, say aye. All opposed. Ayes have it. With that, we’ll go to the Peer report. Representative Gray, you’re recognized.

Gray Thank you, Mr. Chair. [00:13:14]The Peer subcommittee met on Tuesday, July 19. The subcommittee received reports, reviewed items and approved requests for appropriation increases and fund transfers. Three items in the report are held by the subcommittee: [11.1s] Item F1, a rainy day fund transfer for Arkansas Rehabilitation Services; Item G3, a restricted reserve fund transfer for the Department of the Military; and item H4, a cash appropriation for the Division of Heritage. Two items required follow up information, and those handouts are at your desk. The first is a schedule showing DHS funding allocations to senior citizen centers that will be distributed within two weeks after today’s approval. The next is a letter from Energy and Environment explaining liability insurance coverage for contractors of the weatherization assistance program and a map showing proposed distributions over the next five years. In item L5, the report also includes a recommendation that council expunges the vote by which item B2n in the June 17 Peer Subcommittee report was approved. This item was a $500 million American Rescue Plan appropriation for the Department of Education. I move adoption of the report with the exception of item L5, which will be taken up separately.

Wardlaw That’s a proper motion. All those in favor– or second. I have a second. Oh, Representative Lowery, I’m sorry. You got a question on that report?

Lowery Yes, I do. What, what is the status of the three held items? Is it being held over to the next Peer meeting or are we going to take it up as the full ALC?

Wardlaw Typically, the rules are that they hold them to the next meeting unless there’s a motion made to release those items, and I haven’t had that type motion or I haven’t had that type request from the chairs of Peer. So I would say that they’re held to next month.

Lowery Okay. But any member could make a motion to, to release that?

Wardlaw You could.

Lowery [00:15:07]Okay. Well, I do that. I make a motion that those three– [2.5s]

Wardlaw [00:15:10]Is that substitute motion to her motion? [0.0s]

Lowery [00:15:12] I guess it’d be a substitute motion that we adopt the, the held items as well. [6.2s] And I know there are some entities, National Guard and different Department of Parks. They’re waiting on this grant money. It’s already been allocated. And so yeah, my substitute motion would be that we would also adopt as part of the review those three held items.

Wardlaw Okay. Any discussion on that motion? I have discussion, a lot of discussion. Senator Dismang, you’re recognized first.

Dismang Thank you, Mr. Chairman. And on those three items, we were awaiting additional information or just a little bit of clarification what was happening. I do realize that we have a member that’s made a disclosure, but that was made today. And I don’t think most of the members are aware of that or even at this point able to ask questions that they may have about that. Again, I mean, I would ask that you vote against the substitute motion. I believe the first is, is proper and that can always be discussed at our next regular Peer meeting.

Wardlaw Senator Hendren, you’re recognized for discussion.

Hendren [00:16:24]Yeah, I guess like a lot of members, I don’t quite know why these items were held. And so we’re being asked to vote whether to overrule the recommendation of the committee or not. And so I’d ask for a little clarification from the chairs about why they were held and what the disclosure is that you’re referring to so that we can make a vote based on knowing what’s going on. [19.4s]

Wardlaw Senator Dismang, you’re recognized to answer that question as chair of the Peer Committee.

Dismang I’ll attempt to answer that question. [00:16:54]It was brought to the chairs’ attention, or at least mine, that we have a member that’s spouse actually lobbied for these entities. And there was, at the time, wanted some additional information about what that relationship looked like. [14.6s] I don’t believe that that’s been received at this point. And so that’s why they were held so some additional information could be gathered.

Wardlaw Senator Chesterfield, you had a question or statement on this discussion?

Chesterfield Yes, I do, Mr. Chair. Just tell me what the three items are that are being held. It’s not clear to me.

Wardlaw Representative Gray, can you answer that?

Gray Yes. I can go back over the items again. Item F1 was a rainy day fund transfer for Arkansas Rehabilitation Services. And that was 750,000 for World Services for the Blind. Item G3 was a restricted reserve fund transfer for the Department of the Military, which was 5 million for the National Guard Foundation. And Item H4 was a cash appropriation for the Division of Heritage, which was 250,000 for the Sultana Disaster Museum.

Chesterfield And one individual had access or had an interest in all of these things that might create a problem, the military and all of that?

Gray It was– my understanding– go ahead.

Wardlaw Senator, staff is bringing you a letter. I think that will help clarify some things.

Chesterfield All right. “In order to ensure compliance of potential conflict of interest disclosures under rule– under Senate Rule 24, comma, I, will respectfully recuse from discussion and shall not vote or shall vote present on the following items for funding, which may be considered by the Arkansas Legislative Council on or after Thursday, July 21, 2020 [letter actually dated 2022]: Arkansas National Guard Foundation, Sultana Disaster Museum and World Services for the Blind.” In case everybody didn’t get the letter, I just thought I’d read it to you. Thank you so much for the information.

Wardlaw The letter will be sent to all council members. We received it as we started the meeting this morning as chairs. Senator Dismang, you’re recognized for discussion.

Dismang [00:19:13]And just for clarification, I don’t think I mentioned a name, but Senator Johnson did ask that I clarify that his wife is not a lobbyist. I think the registered– she is a registered fundraiser counsel– fundraising counsel, not a lobbyist. [15.3s]

Wardlaw Senator Elliott, you’re recognized.

Elliott Mr. Chair, I am speaking in reference to F1 because I am aware of for years World Services for the Blind has been training folks who could not be trained anyplace else. And in fact, for many folks, it’s a residential facility and they train them to be self-sufficient, not just to do some of the things we assume people who are blind might do. And I’ve been a part of these discussions as their state senator. In fact, it’s down the street from me. And this, this discussion has been going on for almost a year to get to this point. So I just want to make people aware this is not just something somebody from outside was doing. As their state senator, I have been working with them to get to this point. I would have been at Peer yesterday had I had any sense that there would have been a problem. But I can assure you this is something the board at World Services for the Blind has worked on as well and is in support of and that the money is desperately needed and never think this is something just for one area. They do training that prepare people for high level jobs right here in this state. So thank you, Mr. Chair. I just want everybody to know that.

Wardlaw Representative Dotson, you’re recognized.

Dotson Thank you, Mr. Chair. [00:21:15]I was in Peer the other day and these items were not presented. They were– they were held, I guess, or skipped over. So I think before we move forward with, with considering any of them– we’re talking about $6 million here that we haven’t had any presentation on at all to know what they are. [19.4s] And other than a line item on here that says ‘held,’ I don’t have any information on what these funds are going to be used for, what they’re in regards to. And so I don’t know if we can have a presentation like we would in Peer before we have a vote on this. [00:21:50]But I think it would probably be beneficial to at least have an idea of what we’re voting on before we approve $6 million. [5.7s] Thank you.

Wardlaw Representative Gray, do you have something to add?

Gray Thank you, Mr. Chair. Yeah, I just wanted to speak to Senator Elliott’s comments on the rehabilitation services, that $750,000. What was given to us in Peer is that was simply for campus renovation for a group home. It wasn’t anything that was going directly to, to our constituents.

Wardlaw Senator Rapert, do you have discussion?

Rapert Yes. [00:22:55]I just want to get a clarification as to why these were held in the first place. I want a clarification on that. [7.4s]

Wardlaw Senator Dismang, you’re recognized.

Dismang [00:23:09]They were held awaiting additional information about any relationship that may have existed between these organizations and the spouse of a senator. That’s why they were held. That relationship was not disclosed until this morning while we were walking into this committee, despite the fact that there was work being done well prior to today. So that’s why it was held. I believe that it is this body’s– it’s important that this body understand what we are voting on and it’s important for the public that there be transparency. And that, that’s the simple reason why. [32.6s]

Rapert I agree with that.

Dismang And I would also– and [00:23:45]I want to speak to another question that was asked just a minute ago, which is, I mean, can we vote on this now? Well, I mean, we did not have any debate on any of these items or discussion of what they do in Peer, the proper place to have that discussion. [13.1s] And so if we were to take this up now, then I would expect that we would be able to have the World Services for the Blind and individuals that were representatives with them here today testify and make it known exactly how those funds are going to be utilized. I would expect that we would have folks from the National Guard Foundation here to testify and make it known exactly how they plan on utilizing those funds today. [00:24:19]And then I would expect that we would also have folks here from the Sultana Museum so they can discuss exactly how they plan to use those funds and give us some testimony today about that. However, they were not notified to be here today, and they also did not provide that testimony in the Peer committee. I mean, I think that we need to have that type of discussion unrelated even to any relationship that may exist between a spouse and a– and those organizations. [27.6s]

Rapert Mr. Chairman, if I– my point is, is that I understand that we’ve had a disclosure today. But I was wondering why it was held yesterday or day before in Peer. That’s what I’m asking.

Dismang Because there was no disclosure prior, in our Peer committee. There was no disclosure.

Rapert [00:25:05]I guess I’m a little confused because for something that we didn’t know until today, I don’t understand it being an excuse for why it was held the other day. [7.0s] That’s my only question.

Dismang [00:25:15]There was general understanding, as I stated before, and unknown for certain, if there was a relationship between these organizations and the spouse of a senator. We did not know. You are correct. But with not knowing, it was decided that those would be held so that we could gather that information and honestly not do it in this fashion so we could be sure if it existed or not. Now we know today that it does. But also then, that circumvented our ability to have questions in discussion about these three items in the Peer committee. And I think voting on them now would be improper. I mean, we don’t have those organizations here to testify to even about what they’re doing, again, unrelated to any relationship. [40.0s]

Rapert Well, I’m not speaking for or against voting on the issue now. I just really was interested in a timeline of what’s happening so that members can understand what all the concern is about.

Dismang Fair enough.

Rapert And obviously, a disclosure Is being made. [00:26:11]I also know that, my goodness, I know that disclosure– and I don’t know whether Senator Johnson’s made a disclosure in the past on it or not, but many of us are aware of the fundraising activities of his spouse. [13.2s]

Dismang I would not be, but I do appreciate that. And again, this is not in any way to say that any of these organizations have done anything improper. It’s not in any way to say that Senator Johnson or his wife have done anything improper. It is all about just some transparency that I think need to be added among this committee, because disclosures really the way that they’re set out, you know, happen in the Senate often. But there is no requirement in the House for similar type disclosures. Thank you.

Rapert And on that statement, I wonder if the ALC has that same requirement for all the members. Thank you, Mr. Chairman.

Wardlaw Senator Hickey, you’re recognized.

Hickey Thank you, Mr. Chair. I just, I want to say that I concur with Senator Dismang. Him and I have been together on asking this to be held. And what I’d like to say, too, is House leadership, House leadership– this was discussed with them. This was done at the request, just believing that it would be held for a month. I don’t think anybody had any problems with this to be held for a month just so that we could do our due diligence between then and there. I think that Senator Dismang has said this correctly, that, you know, we wanted to look at all that and then provide the transparency was out there. So I would appreciate if you all would give us that little bit of leeway for the month. I don’t think this is any reflection on any of the three entities involved. It was merely us trying to make sure that we are doing things correctly. So again, I would appreciate if we would vote no on the substitute motion.

Wardlaw Representative Jean, you’re recognized.

Jean Thank you, Mr. Chairman. For some of us that don’t know all of what’s going on, we’re trying to put the pieces together. And I guess, the $6 million, what the question is that we want to know answered is any of this $6 million going to pay a fee for, I guess, what we’re talking about, a spouse, and if it, if it is, I think there’s a problem. But if it’s not, I don’t think we have a problem. I think that’s a question that we would, we would like answered. And if it’s not today, next month would be fine.

Wardlaw Thank you. I think Representative Lowery has a request.

Lowery Yes. [00:28:43]You know, I think that this discussion has been worthwhile, but I believe it would be proper to go ahead and pull down this motion. If other members that have expressed concern for the money being held up to different entities, if they want to make that substitute motion, that’s fine. But I’m going to pull mine down. [16.9s]

Wardlaw Okay. That’s proper. There’s two people left in the queue. Are your questions to this, or can we move forward with the motion? Okay. So Senator Hendren is first in my queue.

Hendren Yeah. I mean, I agree with the leadership that certainly this isn’t ready to be voted on. It hadn’t had a hearing. And I guess the one question I have, because what we are voting on by holding these is not funding this $6 million for at least a month, which, again, seems like the right thing to do. My only question regarding that is, particularly the $5 million for the National Guard, on the, on the report here, it says Department of Military, Arkansas National Guard. But I heard from the chairman it was the Guard Foundation. And I guess what I want to know, whether it be the Guard or these other two entities, is there any pushback from them that this is going to affect their operations in the short term? Or is a month not going to be an impact? And would you clarify, is this the military department or is this the Guard Foundation?

Wardlaw Representative Gray?

Gray Yeah, I’ll be glad to answer those questions, Senator Hendren. It is the Guard, National Guard Foundation. And it’s for charitable and educational funds is pretty much the only information that I was given. Had I thought that, I or Senator Dismang thought that, any of these three requests that by holding them it would have affected our constituency in a bad way, I think we might have gone ahead and heard it, and at least, you know, followed through a little bit more. None of these requests are emergent. None of them will affect our constituency right now. And I have not– I can’t speak for Senator Dismang– but I have not heard– I did hear from one that, you know, just essentially let us know if there’s anything we can do. They’re being patient with us. So I have not heard any pushback from any of the three.

Hendren Thank you.

Wardlaw Senator, I also would let you know, staff and Senator Dismang made it to my attention, all these items were not on the regular calendar. These items were all on a supplemental agenda. So I think that’s important for the membership to know.

Gray Two of the three.

Wardlaw Two of the three. I’m sorry. I’m being corrected. Two out of three. Senator Johnson, you’re recognized.

M Johnson Thank you, Mr. Chairman. [00:31:15]And I hope to move this along by being open with my colleagues. Under Senate Rule 24, we are required to disclose a potential conflict of interest. [11.6s] I don’t know about the House rules or Joint rules. [00:31:29]But in the past on several instances where I had a potential conflict because of having a family member that has a relationship with this, I will, even though I am recused, I will vote present or not vote on anything related to any of these entities. I think members of the Senate know that I have gone to the well of the Senate and done this before. [22.0s] There was one that I know Senator Chesterfield sponsored a bill, which was a very good bill, but because of my spouse’s relationship with the entity that would have benefited, I recused and did not participate in the debate nor the vote. I also want to just for purposes of clarifying, I want my colleagues to understand what’s going on. [00:32:16]My wife is, is a fundraising counsel. She’s registered under the, the fundraiser law in Arkansas. [6.6s] She registers with the Secretary of State, and her title, she, she’s called a fundraising counsel. She does not receive any commissions or bonuses or anything related. [00:32:35]She only receives, you know, a flat monthly contractual fee. [3.2s] Her contracts are on file with the Secretary of State’s office, and she won’t get any of this money herself. So it’s, it’s just advising entities on their development program is all she does. And that’s– [00:32:56]so I’ve been very careful even though we’re not required to recuse, we are required to disclose. I choose to do both. [6.8s] I do that. So again, I was not going to participate in this at all, except I do want to not leave this hanging and explain this to my colleagues of how that particular relationship works. [00:33:15]And as far as it only being done this morning, I’m not a member of Peer. I did not know what was coming out of there. And when I learned that these could potentially be brought up in ALC today, that’s when I prepared the letter of disclosure and presented it to the chair and to Ms. Garrity. [19.1s] And I’ll be happy to answer any question if, if it helps move this along. I certainly think this item, it’s totally up to the ALC what you decide to do, whether it’s now or next month. But I will be recused for throughout the time that these items are before this body.

Wardlaw Senator Dismang, I’m guessing it’s related. You good? So we have a proper motion on the floor. Do I have a second? The substitute motion has been pulled, so this motion is to review the report. All those in favor, say aye. All opposed. Ayes have it. Representative Gray, you have one more item. Senator Hickey, I’m sorry.

Hickey Thank you, Mr. Chair. Members, I hope that you all listen closely, because I know there’s going to be some questions in regards to some terminology and words that are in this. But first of all, what I want to say is, let me start by saying that we all know that no one person does anything down here at the Capitol. And what I’m about to bring you has been worked on by a multitude of members, including the speaker, the House and Senate Ed chairs, the Budget chairs and multiple others. So I’ll start by saying in the memo issued by the Federal Department of Education on December 16, 2021, which you all have a copy of at your desk, the Secretary of Education stated that the U.S. Department of Education is committed to supporting districts and schools across this country in addressing teacher and staff shortages. The memo goes on to state that the department urges states and local school districts to utilize, to utilize the resources made available through the American Rescue Plan ESSER Fund to ensure that schools have the teachers and other critical staff they need to support their success during this critical period. In addition, Secretary Key, who’s out in the audience today, forwarded to us this information that the Arkansas Department of Education sent to local school districts regarding application for use of the ESSER funds, which includes the ability to use utilize the funds to support educator and staff stability and well-being, which includes providing additional pay for recruitment and retention of a diverse and qualified education workforce. In light of a clear direction from both the U.S. Department of Education and our own Department of Education that the ESSER funds may be and are encouraged to be utilized for retention and recruitment payments to public school employees, the Legislative Council has the following recommendations– that is a keyword with the recommendations, and I hope everyone will listen– the school district utilizes– that the school districts utilize available ESSER funds to provide retention and recruitment bonuses to teachers in the amount of $5,000 each, full-time classified school district staff in the amount of $2,500 each and part-time classified staff in amounts that are half of those awarded to their full-time counterparts. ADE will bring to the ALC Peer Subcommittee specific plans for each school district’s use of the funds as recommended by ALC, and if, and if the school district is unable or unwilling to meet those recommendations, a comprehensive statement as to why the school district is unable or unwilling to utilize ESSER funds in this manner. So at this time, I’m going to make a motion and I’m going to move that the Legislative Council expunge the vote by which it approved Item B2(n) on June 17 of the 2022 Peer Report, which was a $500 million ARP appropriation request for the Department of Education; the Department of Education bring to the ALC Peer subcommittee its request for appropriation of those ESSER funds in the coming weeks, accompanied, accompanied by the detailed plans of the school districts to utilize the funds in accordance with the recommendations set forth above; and the Peer Subcommittee be given the authority to meet as needed, including outside the regular ALC week to hear these requests of the Arkansas Department of Education and that Peer be given final approval of these appropriation requests. That’s my motion.

Wardlaw That’s a proper motion. I heard a second. There’s a lot of discussion. Senator Chesterfield, you’re recognized.

Chesterfield Thank you, Mr. Chair. Over the last several weeks, we have been touting the importance of teachers and support professionals. And I assume that this is supposed to be in lieu of allowing this to be placed on the agenda for the special session. Is that what you’re saying, Senator Hickey, through the chair of Senator Hickey?

Wardlaw Senator Hickey, you’re recognized to respond.

Hickey Yes, ma’am. I hate to say in lieu, because as far as from the leadership standpoint, we have always maintained that we were going to do our adequacy study and that it was going to– and it was well intended that, that salaries themselves would be included within that adequacy study, which will be due by the end of the year, of which you’re well aware. And then that this would be brought up in our regular session in January.

Chesterfield Well, I guess what’s concerning me is when I heard the argument as to why we were not including the $46,000 or $42,000 minimum salary that the governor discussed was because we didn’t have recurring funds. And yet Mr. Andersen told us this morning that these funds are indeed reoccurring. And as I look around the country, people are using that to raise salaries instead of just giving one-time hits toward teachers and support staff. So would you speak to whether or not this is the rationale and how is that going to get us into, I’d say, a contest really of recruitment for qualified persons if we’re the ones still at $36,000 this year and everybody else has raised his or has raised the salaries of our educators and not us?

Hickey I think by doing this, and I mean you have to say that this is compensation. So compensation in whatever form that it takes, that’s going to be, be added to it. I would hope that whenever the department brings this to us that they would have thought this through a little bit and possibly done it in maybe a couple of, a couple of different disbursements to help maintain that retention. But again, that’s up to them to bring that detailed forth– plan forth that we’re requesting. I know there’s been a lot of talk about the one-time funds. I particularly am one who has said that. And that has always been our practice down here, especially as it, as it deals with large amounts of money that are going to be recurring every year not to do that. And I know what you’re about to stay with the tax cuts. The tax cuts, and nobody here can disagree with this, that is already in legislation that we’ve passed. So those, those cuts are going to come out of GR because the legislation itself already, already has that. I will say to you, of course, that we are accelerating that. And that since we’re accelerating that, those, those funds and those moneys, they’re actually going to be coming out of money, they’re actually going to be coming out of money that will be coming in. We’re not using that surplus. We’re not taking funds out of our surplus, which is currently sitting in what’s called our revenue reserve allotment account if I remember correctly, we’re not taking fund money out of that to actually fund those cuts. So there’s been some confusion that we’re taking that money out of an account, and that’s just not, not the case at all.

Chesterfield Methinks thee protest too much. But if we can speed up tax cuts, it’s time for us to speed up salary increases for teachers and support professionals. Speaking in opposition to the motion.

Wardlaw Audience, first reminder, there’ll be no clapping and no hollering and no chanting. That’s the first warning. Senator Hendren, you’re recognized.

Hendren Thank you, Mr. Chairman. And Senator Hickey, that may be one of the longest motions I’ve ever heard, so I’ve got a few questions about it. I guess the first part of that motion was we’re going to expunge something, an approval that this body made back in June. Which, again, I’m not sure of the parliamentary requirements, but to combine an expunge motion with a whole bunch of other stuff seems a little bit strange, if not outside of parliamentary norms. So I want to ask first about the expunge part of that, because I don’t think I’ve ever seen us either– I know we expunge votes all the time in the Senate, but we had a plan presented and it was approved by this body and now we’re going to unapprove it. [00:43:49]And I guess what I want to know is have we checked with the districts to see how many dollars are encumbered? What are they going to do if in order to comply with the recommendations that follow in the motion, they don’t have enough dollars to cover it? [13.8s] So I guess that’d be my first question about the expunge. Have we even verified the impact this is going to have on commitments that school districts have made based on a good faith assumption that when we approved it, it was approved?

Hickey Yes, sir. That will be in my next motion.

Hendren Okay. And the other thing about the motion that I guess I struggled following was it began with, we’re going to recommend– and you said stress ‘recommend’ as opposed to require– that these districts do $2,500 or $5,000 or the different, different pay levels. [00:44:34]And so it started out as a recommendation, but then it followed up with a procedure that these districts will have to come back and present this with a detailed report about why they’ve not done that. And I guess where I’m confused, are we then saying that we are going to approve every one of these local school district’s plans? [15.5s]

Hickey That’s, that’s really not a procedure, Senator Hendren. That language after the CARES money was inserted into the American Rescue– for the American Rescue money. If I remember, that language was included within the DFA disbursing bill, I do believe.

Hendren I guess what I’m saying is, having spent 15 years on a school board, and I believe you did as well, I can’t imagine a scenario where we get approved and then we go encumber dollars to, say, build something or repair something. Is there a procedure now where they come down here and say, we have chosen that this is our priority and this is– we have to have this for the safety of our kids or for whatever reason, and we say, no, you can’t do that, you got to have this $2,500 and $5,000 bump, this one-time bump. Is that included in your motion?

Hickey [00:45:43]If, if there’s a procedure for them to do that? [2.2s]

Hendren [00:45:46]Yeah. Can we overrule the local school board’s decision to do that? [4.1s]

Hickey [00:45:51]What we have in here that this is a recommendation and that if they decide not to do it, which we fully expect there, there may be some that do, then they’re going to bring that plan before us and we’re going to hear it in Peer. And I mean, now, if–[13.3s]

Hendren [00:46:05]And what if we disapprove it? [1.1s]

Hickey [00:46:06]Sir? [0.0s]

Hendren [00:46:07]And what if we disapprove it? [1.1s]

Hickey [00:46:09]Well, if somebody out there was going to be buying some type of widget or something like that, then, I mean, I guess that that would be the authority of that committee to do that, which we passed in legislation that’s been voted on. [12.8s]

Hendren [00:46:22]So again, to be clear, Peer now is going to usurp all of this authority on these spending decisions of these dollars from local school boards? [6.3s]

Hickey We’re making this recommendation at this time that that’s what we think should be done based on the guidance not only from our State Department of Education, but also from the Secretary of the federal Department of Education. It should have already been done. We’ve heard from our constituents out here as far as their talking salaries, but we understand this is compensation. These funds were available and it should have already been doing– been done that way. So what we’re doing is bringing this to light that these recommendations have actually been made by the federal and our State Department of Education.

Hendren [00:47:05]I guess, again, I don’t want to belabor this, but I still haven’t gotten an answer to the fundamental question is this a reporting back to us or do we actually have approval authority now if we don’t like what they’re doing? [11.0s]

Hickey [00:47:17]We actually do. We actually do vote with an approval during that committee. [3.1s]

Hendren [00:47:21]So again, we have yanked from all of the schools in Arkansas the authority on how they spend these dollars, even though we approved a plan that, that they presented to us. [9.5s]

Hickey [00:47:32]That is not correct. [0.5s]

Hendren Okay. The final question is, there’s been a lot of discussion, as Senator Chesterfield talked about, one time versus recurring. [00:47:40]I think it’s important we be crystal clear. This does nothing, nothing to the salary-based schedule for local school districts. [6.7s] This is– because there is no question, there is some dispute about in our, in our report that Mr. Anderson just presented about recurring versus one-time and how much of this is because of stimulus money that’s been dumped in the economy and so on. But there is no dispute. [00:48:01]This is one-time dollars. This is a one-time bonus. It does not affect the salary schedule or what schools can broadcast to other states about our salary schedule at all. Correct? [8.1s]

Hickey There’s a lot of talk in that, senator. Could I have a direct– you asked me two or three things. [00:48:14]So if you’re asking me if this particular motion, if it passes, is it just a one-time bonus? The answer to that would be yes, sir. [8.7s]

Hendren Okay. That’s, again, what I think it’s important to be clear. Thank you. Yes, sir.

Hickey Thank you.

Wardlaw So members, just to make a few things clear from the chair. There’s a lot of members in the queue. I’m going to recognize full members of ALC first and then I will recognize alternates of ALC. As long as the queue has as many people as it has at the current moment, I will not be recognizing any non-members. So if you’re a non-member and you’re not an alternate, you probably need to find one of those two to get your question asked. We have to be conscious of the time. Representative Godfrey, you’re recognized.

Godfrey Thank you, Mr. Chair. I appreciate the latitude. And maybe this is for Senator Hickey, but you mentioned the, the amount of the bonuses for full-time classified and certified staff. But how much is that total? Does that wipe out the remaining $900 million of ESSER funds? Is that over, under, exactly $900 million? Can you give us a total amount of what those bonuses would be?

Hickey No, ma’am. It would, it would all be, it would all be less than the $500 million that we’re doing. That’s a good point that you make, though. There are within the accounts, and I’m going to speak in general numbers, there is a little bit over $900 million of those ESSER funds that are, that are still out there. This is just the, the motion which was made last month, in June. It was for a $500 million appropriation. That is the only one that we’re dealing with at this point.

Godfrey Okay. So, but just to clarify, the additional part of the bonuses, how much is that total? If every, if every school accepted your recommendation and did indeed give a one-time $5,000 bonus or $2,500 bonus to every staff member, how much money is that total?

Hickey It’ll be under the $500 [million]. The issue that I have and you heard in my motion that we had, we had also included the other staff in addition to the teachers, some of the part-time and some of the full-time. You know, that classification is done through the districts and done through the Department of Ed. So I cannot give you a specific number on that, other than it’s less than the amount that this motion is.

Godfrey Thank you for the clarification. [00:50:52]One more quick follow up is if ALC now has approval authority of these funds, does that not put either the department or the districts in conflict with the requirement that these ESSER funds be flexible, that districts must have flexibility in the way they spend the funds? [19.9s] I know that that’s in this memo. I know we heard that from the department earlier this week in Peer. [00:51:17]That is the provision of how these funds must be spent and used and planned for is that districts must have flexibility in the way they use them. Does this new approval authority put us in conflict with that requirement for the funds? [13.4s]

Hickey This isn’t, this isn’t a new approval authority. This is, this was in legislation that you all voted for and passed as it relates to all American Rescue funds. [00:51:42]All American Rescue funds, whether it’s this or coming from any other agency, what it does is it comes before Peer with a detailed report as to what those funds are going to be used for. That is actually already within our code within, within the state. [18.3s]

Godfrey Thank you.

Hickey Yes, ma’am.

Wardlaw So I think this is a good time to point out, in your motion you gave Peer the final approval. So as Peer meets and takes up these items, they have a final approval of these said items. I had some members ask me for clarification, so I want to make sure that that’s pointed out.

Hickey That’s true. And the reason for that, of course, is we understand the need, the needs to get these funds out. And we knew the next question was going to be, y’all meet once a month. So what we’re doing is we’re being proactive. Now what we anticipate, what we anticipate is that Secretary Key and his group are going to get a lot of requests from a lot of districts who did not understand that they could do this, that they want to do it. And they can bring those to us in blocks and hopefully we can just pass those in blocks and, you know, as soon as they get here. So it’s our intention to move quickly on this. Thank you for the clarification.

Wardlaw Senator, I’m leaving your mic on. Representative Flowers, you’re recognized.

V Flowers Thank you, Mr. Chair. I suppose that I would pose this question to Senator Hickey through the chair. I’m in a relatively unique situation as a member as I represent a school district, formerly two school districts, that is under state control. And as I look at what ESSER funds are used for and recall the impact of the challenges for my school district inside and outside of these emergency funds, because as it relates to safety as well as health, I’m wondering how we can apply this and expect that school districts, either under state control or with issues looming that might place them there, would be impacted by something like this, whereby ESSER funds would be used for teacher raises– or I’m sorry for a teacher bonus or what, whatever this would, would entail– and those needs would still be looming in those troubled school districts. And I would have a quick follow up.

Hickey Yes, ma’am. That’s, that would be part of the motion, where they would bring that comprehensive statement to us as to why they’re unable or unwilling to do it. So although they may be under state control, that is whoever the management of that through the Department of Ed will bring that before Peer.

V Flowers And so my follow up would be, whether you bring it before Peer and Peer says yes or no, either the already troubled school would be impacted by something like this versus getting more sustainable support for teachers by taking away funds from immediate and emergency needs or teachers would not get the support that other school districts would get in those districts and especially in a district like mine that’s under state control. And then moving forward, we’re accelerating tax cuts and then moving into a session where candidates, a candidate for governor and other members running are supporting a zero income tax. So how would we moving forward be able to even address some of these inequities or support teachers–

Wardlaw Representative.

V Flowers when we’d be digging into the tax base?

Wardlaw Let’s stay–

V Flowers I’m done with my question. Thank you.

Wardlaw Let’s stay on, on the subject matter.

V Flowers Well, and Mr. Chair, I’m trying to but I think we have to look at now and look forward to, to determine what the impact of doing this now would be.

Wardlaw Representative, it’s my purview to pick what’s on the subject matter in this committee.

V Flowers I was just explaining how I was trying to do that, sir.

Wardlaw Senator Ballinger, you’re recognized.

Ballinger Thank you, Mr. Chair. Just for clarification and in case I’m wrong, this $500 million that we’re dealing with today, has– none of it has ever been disbursed, correct? [00:56:33]There is not– none of this money has actually been, been applied. I spoke with several of my superintendents and some of them didn’t even, weren’t even aware about this $500 million that’s coming out. So is that, is that the case that we’re not talking about pulling anything back that’s ever made it to the district? We’re talking about holding on to this stuff, correct? [17.1s]

Hickey There’s, there’s– Mr. Chair, may I? That, that’s in my next motion. [00:56:58]That is actually what Senator Hendren was kind of referring to. There’s like $42,000,487 that was supposedly out of this block, which I have a letter from DFA for us to do that appropriation immediately following this. [15.0s]

Wardlaw Senator Ingram, you’re recognized.

Ingram Thank you, Mr. Chair. And, you know, I think all of us here, we all are trying to find a way to make sure that our teachers are paid for what they do for the future of our state. And certainly, I think that the ESSER funds, if they could be used, certainly that ought to be utilized. But I want to make sure that this is not being considered this in lieu of a salary increase as we go forward. That’s, that’s one, just, statement. The second, I’d like to ask Johnny Key, would he come forward to the table? I have a question for him. Oh, we’re not? Excuse me. Forget that. We’re not in debate. My question would, would be, would be that [00:58:20]I have, for instance, a school district that has for six months shopped, gotten bids, architectures for $2.5 worth of exterior doors that need replaced. Now they’re ready to sign a contract. And to answer Senator Ballinger’s question about no, no money– the money is all reimbursed. The school districts spend it and it’s reimbursed. Is there the possibility of this $500 million that we are going to hang out these local school districts that are– that have worked for months to get this thing to go to bid and now they’re ready to sign the contract and there’s no money for it. Is that, is that a possibility? [45.5s]

Wardlaw I’m sorry, Senator.

Hickey He told me just to whisper in his ear since I’m right here. But the, the–

Wardlaw Let’s stay proper.

Hickey Right. I apologize, Mr. Chair. Of course, this money, as everybody knows, has been sent out in three blocks. This particular block of money, as has been stated in here multiple times, was in the June, was in the June meeting. [00:59:38]We know that there’s $42 million. Of course, if there is specific contracts that have already been inked before the Peer meeting, it is my understanding and he can correct me if I’m wrong, that Secretary Key had sent out and told the educational community that this was being looked at and considered before the legislature. Of course, that could be in the detailed plan that’s brought before them and that is something that would be considered. So yes, sir, it would be considered in Peer. [28.8s]

Ingram [01:00:07]So that would be something that would come back that we would have to approve all of these in Peer? All of this money, every school district would come back to us in Peer? [9.4s]

Hickey Actually, that’s the way our legislation is set up, because whenever we, whenever we– you included, sir, me also– I’m not just saying you. We all did, whenever we, this body had requested multiple, multiple times that after the CARES money was there and the American Rescue money was available that we would look at detailed plans of disbursement of any and all agencies. So it’s actually in our legislation. And that’s the reason that the Peer subcommittee is planning on meeting as needed to do, to do the work.

Ingram Well, I think it’s a good thing that as an interim, this is, you know, [01:01:00]we want to get our teachers all of the money that they can. But I don’t want this to take the place. And we’re, it seems to be, we’re working hard just not to face up to raising the salaries when we can and making it work through this ESSER. And other states have raised their salaries for their teachers and utilized ESSER money for bonuses. So I don’t want to forget that. [26.6s] Thank you, Mr. Chair.

Wardlaw Senator Dismang, you’re recognized.

Dismang Thank you. You make some good points. Other states have also utilized ESSER funds for bonuses. And one thing I do want to just provide clarification. [01:01:39]It will be the Department of Education that will be bringing the appropriations to the Peer committee, not the individual districts. Now, the individual districts will each have a plan and they will be stipulating, you know, what they plan on utilizing the funds for, at least the remaining funds for, but it will be the Department of Education that will be bringing those actual plans to the Peer committee. Just a clarification. [22.1s]

Wardlaw Senator Dismang, those individual districts could be available for further questioning, though, correct?

Dismang Yes.

Wardlaw Thank you. Representative Murdock, you’re recognized.

Murdock Thank you, Mr. Chair. So these are questions to the maker of the motion through the chair, please. So, going back to the encumbrance issue, [01:02:33]I’m still not clear on that because the process that Senator Ingram outlined of how projects are done– many times there is progressive dollars paid for preliminary work as it leads to a project. [15.0s] So certainly we’re not saying that the design, the planning and dollars that have been paid by districts that they may not even been reimbursed for, that we’re going to just throw those dollars away if we so choose to, when it comes back to us, to not do these particular projects, so that, enforcing the districts to do the $5,000 or $2,500 allotment that you suggest. So the encumbrance of dollars is a real issue that I think needs to be further discussed and explained and at various levels determinations made on what makes sense. I think the feasibility, the economic feasibility, Senator Hickey, is a question here of whether you can really do that and it’d be economically feasible. That’s the real question that I have with not understanding exactly where you’re going. Also–

Hickey So do you want me to– may I answer?

Murdock No, that’s a statement.

Hickey Do you want me to answer that first? You said it was a question.

Murdock Well, yes, go ahead. Respond.

Hickey Right. I want to go back to, if I remember correctly, there’s been $1.7 billion of these funds. And this was in the last, in the last amount of money that just came through. And you made a statement. And you and I are friends and stuff. So I’m not, I’m not being disrespectful. But you made the statement that we’re forcing this. And I’m going to go back to this is what we’re recommending. So we’re recommending to do this and we’re allowing the process that during the detailed report, if that particular district through the department, you know, if that’s going to be their decision, then that’s what we’re going to look at. I’ve read somewhere, too, with these ESSER funds that, you know, this was supposed to be done with the, with all the stakeholders that are involved. And I think a lot of our teachers and staff, maybe they didn’t know that this was available out there. We’ve heard from multiple people that have told us that. I think obviously now there’s not going to be any question that it can be done. And so they’re all going to have to get together and make this work. And that’s what we’ve been saying. We’re providing this option. We’re providing this option out there within those districts with the stakeholders involved with a full understanding now of what they can do with it to bring it back before Peer.

Murdock Right. I think what you’re going to find is that the department, ADE, did a good job, I think, of explaining to districts their options and flexibilities that they had. You will find that where they could, some districts have done this already where they could do it, where it was allowable, that they have used that flexibility to do what they could do. [01:05:43]Now, the real issue– and I’ll go to point number two– becomes local control. When we, with what I understand your motion to say, it’s going to put us, the 135 of us, in the position of being school board members for all of these districts, because we are going to then make decisions and we’re going to take away, in effect, the duly elected local school board authority, in effect, as it relates to this, this, this issue. We’re going to take that away per your motion, and we’re going to make the decision down here on whether we think it’s what it should be. I think that that’s out of line. [41.6s] I don’t know that we can legally do that. I don’t think that that’s going to be acceptable that we take on that. And I don’t know that we can do it in an effective manner. Last thing.

Hickey Was that question?

Murdock That was a statement. That was just a statement.

Hickey Okay.

Murdock Don’t have a question there. So the good faith effort for additional funds is great. I like what you’re saying with the $5,000 and $2,500. Let’s do that. I do like that. But, I don’t want it to be mixed with the surplus ask. That’s a whole different conversation. I love this, that you’ve come to this, and you’ve even put it in the form of a motion. [01:07:12]So you’re willing to do this, and then we’ll talk, continue to have a discussion, hopefully, about really the big point that we do something to supplement the salary schedules of our teachers that deserve it. So thank you so much for bringing this forward because you’re really saying something by doing this today. [19.9s] You’re really saying something and we’re glad to hear that you do want to help and that you, that the attitude would be that we’re going to help and take care of our teachers. Thank you.

Wardlaw Representative Fite, you’re recognized.

Fite Thank you, Mr. Chair. One of my superintendents is asking me– they are required to spend 20% of these ESSER funds on learning loss. Would this affect that at all?

Hickey No, ma’am. That will be part of the, part of the plan that’s brought back by the department.

Fite Thank you.

Hickey Representative McCullough.

McCullough Thank you, Mr. Chair. I do want to echo what my, some of my colleagues have said about this not being a way to just kick the can down the road, that we’ve got to do better for teachers in Arkansas. But my question, Senator Hickey, is if a school maybe has received less money than maybe even surrounding schools around it, and they’ve used their money for things that they really need like learning loss and student achievement, are they going to be able to get any money to help their teachers?

Hickey That, that is going to be, that is going to be within that part of the motion– we have discussed that– where if they’re unable or unwilling to do that through the department, they’re going to have to list that within their detailed plan for that to be considered. So, yes, ma’am, I’m not, I’m not telling you that will not be considered. It’s just going to have to be in the plan whenever it comes back to Peer.

McCullough I just want to make sure. There seems like there are lots of if’s and lots of complications and not many guarantees in what we’re talking about. And I just wish when we were approving this money in June, we would have made sure that we were that concerned about this money going to teachers then. Thank you.

Hickey Thank you, ma’am.

Wardlaw Senator Irvin, you’re recognized.

Irvin Thank you. Just point of clarification. So just point of clarification. We– this isn’t about school safety. That, that’s, that’s a different conversation. Just so, as we’re looking at this, I go back to that memo from the United States Department of Education where they emphasized that this ESSER money should be used for recruitment and retention, primarily for recruitment and retention of teachers and staff. And so, you know, that has nothing to do with the school safety issue. So I’ve heard some members kind of talk about that. That’s a whole separate issue and category and that these ESSER funds really are designed for recruitment and retention and there’s some learning loss and other categories. So I just wanted to point that out as a point of clarification. And, and to Representative Murdock’s question, there is a full commitment, there is a full commitment from the, the education committees during the adequacy study to really engage in this issue. Thank you.

Wardlaw Representative Ladyman, you’re recognized.

Ladyman Thank you, Mr. Chair. It seems to me that– like everybody else here, I’ve got tons of emails from teachers, maybe some of them in this audience that say that they need funds and they need it now. And I’ve got emails this morning that said, do something now. You know, we need help now. So it seems to me that our leadership has found a way to give teachers funds, $5,000, I believe, right away. And what I’m hearing from our committee is reasons that we can’t give these folks $5,000 right now. And a lot of, well, what if’s, what if this doesn’t work? We can have a debate about whether it’s going to be a continuing– we can do that later on. But members, I believe we ought to vote on this and we ought to give our teachers the money that they deserve and we need to give it to them now. We can debate later on these other issues. Our leadership has found this funds. They found that it can be used. The federal government has supplied it to us for this purpose. So I think we should do that now. And the– my question is, Senator, if I understood you correctly, the Peer committee can meet at any time. They could meet next week as soon as they get the request from the Department of Education to distribute these funds. They can meet and approve those right away. Is that correct? So it can be done right now?

Hickey Yes, sir.

Ladyman Thank you.

Wardlaw Senator Elliott, you’re recognized.

Elliott All right. Thank you, Mr. Chair. And, Mr. Chair, I guess I would be asking my first questions here to Senator Hickey, if that’s okay. So, Senator Hickey, by, by your motion, if you would just explain to me just as succinctly as you can, what is the– what is it that you’re trying to do that’s going to address the issue of our inability right now to recruit and retain teachers? How is your motion– how do you see your motion addressing that?

Hickey Well, Senator, Senator Elliott, I guess I would have to say that the letter that we’ve received from the– and I hope you all have a copy of that in front of your desk. You’re supposed to. So I’m being told that maybe you don’t.

Elliott We don’t.

Hickey But we had received, we had received the letter from the federal secretary of the department. I apologize. I don’t remember her name, don’t want to mispronounce it. But that was specifically what these, what these funds were supposed to be used for. So that, that actually was what the design of these ARPA through ESSER funds were to be used for or that was that was definitely part of it. And they’ve actually stipulated that they wanted that to happen, that that was their recommendation.

Elliott But what I’m talking about, though, is your intention. Does your motion come with the intention of this is going to address the immediate problem we’re facing in recruiting and retaining teachers?

Hickey Absolutely. Absolutely, yes. Yes, ma’am.

Elliott All right. So if there are some school districts who have already encumbered their funds and this is optional, because I can imagine that would be school districts who need to recruit and retain the most, what we are doing is saying that we are recommending that you use this money for this purpose. So I’m a school district, I’m ready to start school, I need to recruit, I need to retain. And I now have to, number one, decide–

Hickey Mr. Chair, can you ask members to quiet down? I’m having a hard time hearing this.

Elliott Okay, I will–

Hickey I know she’s going to ask me a question.

Elliott Yeah, I am. Yeah, absolutely.

Wardlaw Members, if you would, take your conversations out of the room.

Elliott So I am a school district, and I am right now in a position where I’m trying to recruit teachers and, in some cases, retain, retain teachers because those teachers are going to go someplace else and get a real raise, not, not a bonus. How– and, and they’ve spent the money on something else even, when they come before us to say, I don’t have the, the funds for– that we are dictating that they spend now because it’s encumbered. And they have– do you– are you under the impression that teachers are going to wait around for, to wait for this bonus rather than go someplace else?

Elliott It’s– I guess, let me– the money is going to be immediately available if, if they have it like that. I guess I need to go back one more time. And members, I apologize. There’s been $1.7 billion. This is the $500 million that was just done last month. So there was no authority approval given. We have tracked that down. Senator Hendren asked me that earlier. And my motion is going to be there’s been less than 10%– or there’s been $42 million– excuse me. There has been $42 million of that money is what has been spent. So that money, that money should be available out there for that to be done. In the event that there is a situation, as you discussed, that’s going to have to be brought before us as Peer through the department.

Elliott And in, in cases, say like Helena-West Helena right now– that’s a district that’s under state control. One of the reasons they’re under state control is they can’t hire enough certified teachers. [01:17:52]That’s one of the reasons. I would like us to think through whether or not we think giving folks a bonus is going to help Helena-West Helena hire certified teachers when they can go someplace else. And Mr. Chair, I would really like– I recognize where we are with parliamentary procedure, but there are just questions here I have that we need to hear from the Secretary to explain some of the things to us what has gone on. Is that just out of the question for you or may we have him up here to explain some things to us? I have questions. [42.9s]

Wardlaw [01:18:37]I understand your questions. It is out of the question at the moment. We typically don’t hear from witnesses during a motion, and this is considered discussion on a motion that Senator Hickey has made. So I would rule right now that we would not hear from anyone from the table. [16.6s]

Elliott [01:18:54]Might we do so before we vote? Are you saying that is out of the question before we vote? [5.1s]

Wardlaw [01:19:04]We’re, we’re still in the motion and we’re going to be in the motion until we vote. So the answer is no. [4.8s]

Elliott [01:19:10]All right, then, Senator Hickey, and I know there have been some things said about adequacy. All of us understand that our surrounding states have surpassed us. We’ve seen the proposal from the governor. It was a proposal that was funded. Do you insist that that proposal does not have ongoing funding in it, the one from the governor? [32.4s]

Wardlaw [01:19:48]Senator, again, I’m going to rule that that’s not part of this subject matter. And since I’ve made that ruling earlier, I’m going to be consistent. [5.4s]

Elliott [01:19:55]Well, I don’t know, Mr. Chair, how– I don’t know how to be well informed to vote because this– if this is presented to us as our only option and we can’t even look at the possibility that something else was already funded and that we had to be here. [18.4s] I’m trying to get to the, to the, to the notion that, is this the only way that we could do this because of not having a plan with ongoing funding when clearly there is a plan out there that has ongoing funding in it. It’s not fair to the teachers, it’s not fair to the support personnel that we say we’re going to give them a bonus. I’m not saying that’s nothing, but it’s not– that’s not addressing the issue that we have that like the folks in Helena-West Helena, who are under state control because they can’t hire enough certified teachers, for example, and they are not the only one. And, and if we can’t even get the secretary to come and answer some questions for us, that leaves us in a pickle, I guess you would say. And the last question, Mr. Chair. I need to ask through you, if you will allow me to since the chair of the Senate Education Committee addressed adequacy, may I please address a question to the chair?

Wardlaw You’re recognized.

Elliott Thank you. [01:21:23]And Senator Irvin, when you said that we are totally committed to making sure we address the issue at hand, which is far less the bonus than the ongoing work we need to do to recruit teachers and retain teachers and support personnel, what do you mean by that? [22.4s] Do you mean that we can look at the problem that’s in our faces right now and [01:21:53]that the adequacy committee fully intends to come through with the funding that is going to address the issue unrelated to any kind of bonus? [11.3s]

Irvin Thank you for the question. So if you’ll remember, in 2021, I passed legislation that overwhelmingly passed by every member, I think, in the General Assembly that actually did dramatically increase teacher salaries for, to reach a higher average teacher pay. And we created a new categorical fund separate and above the adequacy matrix formula. And we can pass out the matrix worksheet for all members here where I think we fund teacher salary plus benefits at about $70,000 plus, separate from principals. [01:22:48]But in that categorical fund, there was an additional $52 million in additional support given to schools so that they could raise teacher salaries to meet a higher average across the state. That was my legislation with Representative Cozart that we worked very hard on, and that got us to the new upcoming scheduled raise to create a new base salary at $36,000. [24.2s] So when I say I’m fully committed, I think I have a history to show that I’m fully committed as I’ve voted for every teacher’s funding increase, every education funding increase in the past, and our legislature has supported that under Senator English’s leadership for so many years. And so, you know, we’re committed to this issue, as we always do an adequacy study to, to, to always look at teacher salaries, all expenses, diesel fuel for buses, instructional material, professional development. I mean, there’s a huge laundry list, but we also need to look at the recruitment and the retention of bus drivers, of classified personnel, as well as certified personnel. I’m very mindful of the fact that there were some school resource officers who are classified personnel, but not law enforcement officers, who did not receive a one-time bonus after– out of what we did for law enforcement officers. Some did because of their employment agreements. So that is my commitment. We’ve always been committed to that. We have a history of showing that we’re committed to that, and we’re going to continue down that process with recommendations in November to conclude in November for recommendations in the 2023 general session.

Elliott Senator Irvin, I heard everything you said except the answer to my question. So what I’m asking you is, you spoke for the entire committee when you, when you spoke. And so I’m asking, not about everything else you’ve said, about the committee’s commitment to making us competitive, at least with surrounding states. [01:24:57]There’s no surrounding state that pays $36,000. That, that’s for a starting salary. I’m not saying we didn’t make progress, but that’s not my question. [10.3s] If we give everybody this bonus that we’re talking about today, that is not going to do a thing toward the future and making sure we can recruit and sustain and retain teachers. My question is, what’s the commitment? [01:25:27]Are you saying this committee is committed to teachers getting raises, at least at what the governor had put out there and even pulled back on to make us competitive with, at least with surrounding states? [13.5s] What’s the answer to that question?

Irvin [01:25:44]Senator Elliott, I’ve stated my position. I’ve stated my answer. [3.6s]

Elliott [01:25:48]So your position, then, is not to answer my question? [2.2s]

Irvin [01:25:51]No, ma’am. We are in the adequacy study. You’re very familiar with that. You’re very familiar with it. [5.5s]

Elliott [01:25:57]That’s why I know to ask this question. [0.7s]

Wardlaw Senator, we’re still getting off queue.

Irvin Thank you.

Elliott So. Well, I will finish then, Mr. Chair, with this, because I do want it to be clear to folks that we are in a position right now where people may or may not give teachers and personnel, other personnel, a bonus. [01:26:16]So I don’t know how we vote for something where we don’t know exactly what’s going to happen. We don’t know how many school boards out there have encumbered money. We don’t know if they say they have and they come talk to us and say, we’d like to give a bonus, but we can’t. We don’t know if we’re going to be able to do that. We can’t get answers from the commissioner [18.9s] and I get what you, what you’re saying. And we can’t even say to people– because this is a bait and switch if we are not careful about what we’re doing. [01:26:45]We’re going to give somebody a bonus, and that’s not the issue that we need to address in the state. And we’re going to act as if, because we’re still in adequacy, that we cannot give people a raise. [14.5s] But we can, without some kind of full blown study, we can do something about taxes, Mr. Chair. That’s my concern. [01:27:09]Now, I don’t want us to go out of here saying we have given a bonus and adequacy is going to do something that the chair herself said we’re going– we are fully committed. Committed to what is the question, Mr. Chair? And I’m not going to get an answer to it. [18.3s] And, yeah, I’ve been on that adequacy committee for a long time, and I know how this works. What we generally do, we get down to a point– well, what does Moody’s say? What does Global Insight say? I know. I’m about to finish. And then we go, oh, one says there’s a 3% Cola we ought to give. The other says maybe a 5% or 2%, and we just go somewhere in between. That is not going to get us out of the pickle we’re in. That’s my problem with knowing how all how we are supposed to vote with all of those things out there that we are not addressing. Thank you, Mr. Chair.

Wardlaw Representative Ladyman, you’re recognized.

Ladyman Thank you, Mr. Chair. Well, you know, I believe it’s been a really good discussion. [01:28:12]There’s been a lot of things brought up that we need to address. And I agree that we need to look at teacher salaries and we need to help them wherever we can. But what I’m fully committed to right now is to give you all $5,000. That’s the debate right now. These other things that we’re talking about, we need to debate this. We have time to do that. But again, the teachers that have talked to me said that they need help right now, and some of the discussion here does not even talk about the $5,000 that we want to give to you now. And I think that’s what we need to vote on right now. So I want to make a motion for immediate consideration. [41.7s]

Wardlaw That’s a proper motion. Non-debatable. All those in favor, say aye. All those opposed. Ayes have it. Motion passes. With that, we’ll take a vote on the motion that Senator Hickey has presented. All those in favor, say aye. All those opposed. Ayes have it. I only see two hands. With that, we’ll move on to the Review subcommittee. All right. Roll call. There was only two hands in the air at the time, by the way.

Yes: Hammer, Pitsch, Mark Johnson, Ballinger, Hill, Davis, Blake Johnson, Hester, Hickey, English, Caldwell, Sample, Dismang, Bledsoe, Irvin, Rice, Milligan, Cavenaugh, Richmond, Vaught, Speaks, Lanny Fite, Beck, Gray, Ladyman, McNair, Eaves, Hillman, Charlene Fite, Bragg, Wooten, Lowery, Cozart, Bentley, Eubanks, Deffenbaugh, Shepherd, Jean, Meeks, Dotson, Wardlaw.

No: Leding, Hendren, Chesterfield, Elliott, McCullough, Whitaker, Murdock

Wardlaw [01:35:37]With a vote– a threshold of two-thirds vote, the motion has passed. [3.7s] So with that, we’ll move on to the Review subcommittee. Representative Bragg– I’m sorry. Senator Hickey, you’re recognized.

Hickey Mr. Chair, if this is not the appropriate time– again, there was some discussion that– with a letter that was, that was as it related to those funds that came to the DFA. Are we going to address that now or later in–

Wardlaw Now is good.

Hickey Okay. So members at the, at the current time, I move approval of the appropriation request for the Department of Education in the amount of $42,487,629 as requested in the letter we have been provided this morning from DFA.

Wardlaw That’s a proper motion. Do I have a second? I have a second. Do I have any discussion on the motion on the floor? Senator Elliott, you’re recognized.

Elliott Mr. Chair, my question was not on that motion. My question was–

Wardlaw Okay, then we’re going to take up this discussion first. Representative Murdock, do you have discussion on this motion?

Murdock Yeah. Well, a point of clarification or a question, yes, to clearly define exactly what that is for. I hear the motion. I’m looking at something that just was handed to me.

Hickey Yes.

Murdock So somebody– can somebody clearly define in detail what exactly this is for?

Hickey Yes, Representative Murdock. As the discussion– during the discussions of the $500 million, there was some questions asked, of course, on how much of that money had been spent. We had done– we had looked at this. And that is what that money is. It’s for the Department of Education Division of Elementary and Secondary Education. So that’s what– that’s that appropriation.

Murdock That’s how much is spent so far.

Hickey Out of that $500. Yes. Not, not the $1.7 [million], of course. And there’s still other moneys available. This is out of the $500 million. Excuse me, sir.

Murdock So what are we voting on? This is just a report.

Hickey That, that– this is the appropriation– this is the appropriation for that money. This appropriates that money.

Murdock Chair, I still have a question when we get past this.

Wardlaw What’s your question?

Murdock Well, it’s not germane to this motion. But, but if you’re ready for them, it’s going to be still asking that we hear from Secretary Key.

Wardlaw We’ll come back to that.

Murdock Thank you.

Wardlaw Senator Elliott, do you have a question on this motion?

Elliott No. That, that was my question, too, that when we get through this, at some point, could we ask Secretary Key a question?

Wardlaw We’ll see what kind of time we have at that time. Senator Hendren, you’re recognized.

Hendren [01:38:28]So to be clear, this is the first $42 million of the $500 [million] that every school district is going to have to come up here and say, ‘Mother, may I’ on? Is that correct? [7.1s]

Hickey [01:38:40]No. [0.0s]

Hendren [01:38:40]How is that not correct? [0.4s]

Hickey [01:38:42]Mother, may I? I don’t think any school district’s going to come and say Mother, may I. [3.6s]

Hendren [01:38:47]But they cannot spend any of that $500 million without us bringing it now before us to approve. Is that correct? [5.4s]

Wardlaw [01:38:53]That is correct. What this is, is the $42 million that was already spent from June 17 to this day. [5.1s]

Hendren [01:39:00]And again, my point on that is there’s another $460 [million] or so that we just unapproved and said now has to come back for this process for every dime, correct? [9.1s]

Wardlaw [01:39:10]That is correct. [0.3s] Representative Wooten, you’re recognized.

Wooten Thank you, Mr. Chairman. Senator Hickey, does– what amount to salaries– I’ve had some superintendents ask me since they’ve heard about this, that they have committed to some salary out of this money for, for new teachers. In other words, they’ve entered into contracts. Are, are those going to be honored? Are they still– will they be viable?

Hickey That, that was, that was in the other one. That, that should– that discussion should have been the other one. This is, this is just as it relates to the appropriation of these, of this $42 million.

Wooten So, where do they stand if they’ve entered into a contract with new teachers that are going to come in salary wise?

Hickey Again, Representative Wooten, that’s a– that would be in the detailed plan that they would bring before us. That would be part of that comprehensive plan.

Wooten All right. Mr. Chairman, just a point of personal privilege here. [01:40:28]Colleagues, I hope we’ve learned what we have, what we have here we refer to up in White County as a mess. A mess. Forty-two years ago, I chaired the first finance– School Finance Commission. We had the same discussion that we’ve had here today. And I hope, for the teacher’s sake, that we’ll do something about it and make sure it’s done right. The teachers heard two things from the governor. The governor said, I’m going to include in the call $300 million. They heard two things. Special session, pay raises.[49.7s]

Wardlaw Representative Wooten.

Wooten I know, Mr. Chairman, but I think this needs–

Wardlaw Representative Wooten.

Wooten Let me finish.

Wardlaw No. Listen, it’s not germane and I’ve made this ruling all day.

Wooten It’s germane to the $42– [mic turned off]

Wardlaw Okay, here we go. So I have a motion and a second. All those in favor, say aye.All opposed. Ayes have it. Motion is passed. Representative Wooten. Representative Wooten.

Wooten [without mic] I’m tired of fooling with this body not addressing the teachers and their needs in our school districts. Thank you Mr. Chairman.

Wardlaw Representative Bragg, you’re recognized to give the Review subcommittee report.

Bragg Thank you, Mr. Chair. The Review subcommittee met on Tuesday and reviewed methods of finance, discretionary grants, services, contracts. In addition, a lease agreement disclosure was made to the committee. No items were held. I move adoption of the report.

Wardlaw That’s a proper motion. Do I have a second? Members, we’re still in session, so let’s keep our conversations quiet. I have a second. All those in favor, say aye. All opposed. Ayes have it. With that, we’ll move on to the Employee Benefits Division Oversight. Senator Rapert, you’re recognized.

Rapert Mr. Chairman, the Employee Benefits Division Oversight Subcommittee met on Wednesday, July 20, at 10 a.m. in Committee Room A here in Little Rock. The subcommittee approved the actions of the State Board of Finance, which met on July 11, 2022. The actions approved were the adopted health insurance premium rates for Arkansas state employees and public school employees for the calendar year beginning January 1, 2023. Interim Secretary for the Department of Transformation and Shared Services Mitch Rouse informed the subcommittee that he intends to pull down the current procurement for pharmacy benefit managers services for EBD and will not be issuing a contract under that request for proposals. Secretary Rouse stated that he will work with EBD and the Segal Group to issue a new procurement for these services in the near future. That’s the report. Mr. Chairman.

Wardlaw Is that your motion, Senator?

Rapert Yes. Motion for review.

Wardlaw That’s a proper motion. I have a second from Representative Meeks. Any discussion on a motion? Seeing none, all those in favor, say aye. All opposed. Ayes have it. Members, you have the reports that follow there. There are none that need action today. There’s no new business. This meeting stands adjourned.

July 21: Arkansas Legislative Council transcript

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