Paving the way

Governor, others launch campaign for highway tax

The push is on for a proposed constitutional amendment to extend a halfpercent sales tax earmarked for highways and bridges.

Gov. Asa Hutchinson and other proponents of Issue 1 on the 2020 Arkansas ballot officially launched the campaign on Friday.

The sales pitch centers around boosting jobs and economic activity while improving state highways, city streets and county roads, all “without raising taxes.”

Taxpayers do pay a half-percent sales tax for highways now, so there would arguably be no increase. Yet, a more accurate representation of what the proposed amendment would do is to replace a temporary tax with a permanent one.

Passage of Issue 1 is a key element of Hutchinson’s multi-faceted plan to pump hundreds of millions of dollars into highways.

Earlier this year, Hutchinson persuaded state lawmakers to approve increases in fuel taxes and registration fees and to allocate projected tax receipts from casinos to get part of the money for his $300 million annual funding package.

But the big money — more than two out of every three dollars in the package — hinges on the 2020 election and extension of the sales tax that voters first approved in 2012.

The tax proved popular then. Voters approved the levy by better than 58 percent. Receipts from the tax continue to make payments on a related highway bond issue.

The tax was sold to voters back then as one that would expire after 10 years, when the debt would be fully retired.

The proposed amendment would make the tax permanent, if voters agree, effectively changing the temporary levy into an ongoing revenue source for highways and other infrastructure.

Hutchinson labeled Issue 1 “the most important issue on the ballot next year.”

The tax question is actually one of three issues referred to the people by the Legislature earlier this year. The others would change legislative term limits and the process for citizen-initiated ballot issues.

Several other initiatives are also being circulated by citizen groups, so the full ballot picture still isn’t known.

What is known is that none of the other proposals is likely to have as strong a bunch of advocates as Issue 1.

Just look at the list of organizations that have signed on as backers: Arkansas State Chamber of Commerce, Arkansas Poultry Federation, Arkansas Trucking Association, Arkansas Farm Bureau, Associate Builders and Contractors of Arkansas, Northwest Arkansas Council, American Traffic Safety Services Association and the

American Council of Engineering Companies of Arkansas.

Expect all of them to put money and energy into the campaign to make the tax permanent.

And those are just the folks listed as part of the ballot committee promoting passage of Issue 1.

Yet they are hardly the only ones who would like to see this particular source of tax revenue keep coming, not just to the state government but also to the cities and counties.

Under a long-established formula, 70 percent of receipts would go to the state government. The remaining 30 percent would be split between the state’s cities and counties.

So, tack the county judges, mayors and the governing bodies of every county and city in the state onto the list of likely supporters of Issue 1.

Remember, too, that they can be a formidable force in selling extension of the sales tax to their constituents.

Then, of course, there are the state lawmakers who voted to refer the issue to voters and countless others employed by state and local government who have a direct interest in seeing the amendment pass.

That doesn’t even take into account the people and companies who will compete for highway-related contracts funded by this tax or, for that matter, the folks who drive all these highways, county roads and city streets.

The potential constituency for the tax is obviously huge, as reflected in some recent polling.

According to Hutchinson, a poll conducted Oct. 8 and 9 by the Gilmore Strategy Group reported 62 percent of those polled will either vote for or probably vote for Issue 1. The poll had a margin of error of 3.45 percent.

Hutchinson said the poll gives him confidence “that we are on the right track and that the public understands the need here.”

He also emphasized the need for an effective campaign to pass Issue 1 “because a ‘probably vote for’ is not a ‘vote for’ yet.”

Nor is it a given that voters who favored a temporary tax in 2012 will accept a replacement tax that never ends.

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Brenda Blagg is a freelance columnist and longtime journalist in Northwest Arkansas. Email her at brendajblagg@gmail.com.