Arkansas Governor Proposes Sales Tax Increase To Fund Medicaid

Arkansas Gov. Mike Huckabee (R) on Nov. 14 proposed increasing the state sales tax by five-eighths of 1% to pay for several initiatives, including Medicaid, the Arkansas Democrat-Gazette reports. State spending on the Medicaid program is projected to increase by $247 million in the next two years; the tax increase would provide around $79 million in general revenue needed for the program next year and $107 million in the second year, according to state Medicaid Director Ray Hanley. Hanley said that the state needs to increase Medicaid funding "just to ensure the current level of Medicaid services are maintained," the Democrat-Gazette reports. He added that when matched with federal money, the $247 million increase would provide about $988 million for the program over the next two years. State Rep. Marvin Childers (R) expressed concern that the state's Medicaid spending estimate for the next two years might be "too conservative" because of "double-digit growth" in program spending and the number of beneficiaries in recent years, the Democrat-Gazette reports. Hanley said that the state is continuing efforts to reduce Medicaid growth by requiring beneficiaries to prove their services are medically necessary. Arkansas' Medicaid budget for this year is $2.42 billion and is expected to total $3.26 billion in two years (Rowett, Arkansas Democrat-Gazette, 11/15).