Northwest Arkansas Democrat-Gazette
Governor: Let voters decide tax for roads
He favors 2018 ballot measure
HOT SPRINGS — Gov. Asa Hutchinson said Thursday that he would like voters to decide whether to authorize a fuel-tax-financed bond issue to raise more money for highways through a proposed initiated act on the 2018 ballot.
Speaking at a gathering dedicated to rural issues, the Republican governor signaled support for a proposed initiated act based on a bill that failed to clear the Legislature in this year’s session.
That legislation, sponsored by Rep. Dan Douglas, R-Bentonville, would have asked voters to consider approving a bond issue to be financed by a 6.5 percent sales tax on wholesale fuel prices. The statewide tax would have raised an estimated $200 million a year.
After Douglas’ bill failed to clear the House of Representatives, the Arkansas Highway Commission last month turned its attention to the option of proposing an initiated act to qualify for the 2018 general election to raise more money for highways.
“In my view, we need to bring a highway plan to the voters in 2018 and put it on the ballot and give the voters an opportunity to develop a highway plan,” Hutchinson told about 400 people attending a luncheon at the Arkansas Economic Development Commission’s annual Rural
Development Conference here.
“So I hope that y’all will be open to that. I know there are groups that are working on that, and I would like the same plan that was presented to the General Assembly and narrowly did not get out [of the House] be presented on the ballot to give the voters that opportunity to vote on that plan,” he said.
Hutchinson’s remarks came a day after Douglas and House Speaker Jeremy Gillam, R-Judsonia, speculated during a discussion at the same Hot Springs conference that bridges might have to collapse or major accidents occur on deteriorating roads before the Republican-dominated, tax-averse Legislature would act to raise more money for highways.
In the past six years, voters have twice approved measures to give more money to state roads.
In 2011, they authorized the Highway Commission to issue up to $575 million in bonds to help finance a $1.2 billion construction program focused on the interstate system. A year later, voters approved a temporary half-percent sales tax to help pay for a $1.8 billion construction program aimed at regionally significant projects. The sales tax is in place through 2023.
Increased funding for highways has been a major political issue in several states, the Associated Press reported this month. In April, Tennessee Gov. Bill Haslam signed into law legislation that raises that state’s gas and diesel taxes that would bring in about $350 million for the state’s dedicated highway fund and local governments’
road and bridge needs.
But in approving the new law, Tennessee legislators also cut several taxes in the general fund by some $410 million, including a 20 percent reduction in Tennessee’s 5 percent sales tax on groceries. In Hot Springs, Hutchinson said highways are critically important to rural Arkansas.
“As you drive around the farm-to-market roads, the overlay that we need to have in rural Arkansas is critically important, so though we have enhanced our highway funding with $200 million more in [federal] funding with the state match [of about $50 million], we still need to have more for a long-term highway plan,” he said.
To qualify an initiated act for the 2018 ballot would require the signatures of 67,887 Arkansas registered voters to be turned into the secretary of state’s office by July 6, 2018.
Asked whether he would appear in television commercials for such a proposed initiated act and raise money to qualify the proposal for the ballot, Hutchinson said that “I have got my own campaign in 2018, so I would leave that to others to handle the initiated act if they want.” Hutchinson formally announced his bid for a second four-year term as governor in the 2018 election last week.
He held a fundraiser at the Capital Hotel in Little Rock in advance of this year’s regular session and reported more than $690,000 in his campaign treasury at the end of March in his latest campaign finance report. No one has announced their intent to challenge Hutchinson for governor yet. The filing period for state and federal offices will be Feb. 22-March 1.
Asked about Gillam and Douglas’ remarks, Hutchinson said in an interview that “the Arkansas voter has generally supported highway improvements if they know exactly where it is going and have confidence in the program.”
“I can’t lead that effort, but I can express my view … that that’s the right next step. I don’t want to bring it back to the Legislature. I want to have it on the ballot in 2018. I think it’s the best plan,” he said.
State Highway Commissioner Robert S. Moore Jr. of Arkansas City said that “the governor’s support is a major factor in whatever we do.”
During the legislators’ panel discussion here on Wednesday, state Rep. Joe Jett, R-Success, said he voted against Douglas’ highway bill because eliminating the current 6.5-cent sales tax exemption on fuel equates to an 11-cent tax increase with $2-a-gallon gasoline, but would mean a 22- or 23-cent tax increase with the gas price at $4 a gallon.
He also said the Highway Department projected that Douglas’ measure would increase highway revenue by 3 percent a year while the cost of highway materials for the department have increased an average of 4.31 percent over the past 30 years.
“Under this bill, we were still going backward 1.3 percent on inflation, and until we get our hands wrapped around the inflation mechanism, I think it is going to be hard sell,” said Jett, who is chairman of the House Revenue and Taxation Committee.
Asked about Jett’s comments, Douglas said Thursday that “Joe has got his own agenda he wants to pursue.”
“I don’t care how we do it, as long as we get more money for highways. Everyone has different opinions on highways and that’s fine,” Douglas said. Jett said he would like to see a proposed highway plan be tied to an expected tax overhaul plan to be recommended next year by the Arkansas Tax Reform and Relief Legislative Task Force that he serves on.