Governor weighs in on highway funding

LITTLE ROCK — Arkansas’ governor said Tuesday he’d “vigorously oppose” any highway funding measure going before voters next year that calls for tapping into general revenue, such as taxes collected from vehicle sales, to pay for road improvements.

Republican Gov. Asa Hutchinson cautioned state highway leaders and others looking at putting a highway initiative on next year’s ballot that tapping into general revenue would threaten other needs in the state’s budget.

“I will vigorously oppose any plan that taps additional revenue from our general stream. There’s some discussion of ‘well, we ought to divert sales tax on new and used cars or batteries over to highways,’” said Hutchinson, who said such a move could create a hole between

$100 million and $300 million in Arkansas’ budget. “Those are funds that are necessary for education, for public safety and for all the other needs of our state, and so I say, no we cannot divert that general revenue stream.”

Hutchinson’s comments came a day before the state highway commission is expected to discuss potential ballot proposals for highway funding. The panel voted in June to pursue such a ballot measure after a highway plan failed in the state Legislature. The panel has not endorsed a specific proposal, but ideas floated in June included some that combined a tax increase with diverting auto-related tax revenue to highways.

A state Department of Transportation spokesman said the commission did not have an immediate comment on Hutchinson’s remarks but would likely address them today.

Supporters of any highway plan would have to submit thousands of signatures from registered voters by next July to get a proposal on the 2018 ballot. A change in state law would require nearly

68,000 signatures — equal to 8 percent of the votes cast in the last governor’s election — to get on the ballot, while a proposed constitutional amendment would need nearly 85,000 — equal to 10 percent of the votes cast in the last governor’s election.

Hutchinson said even gradually diverting the revenue over time would still affect state services and could also jeopardize efforts to further cut income taxes in the state. A legislative task force was formed this year to issue recommendations before the 2019 session on additional tax cuts.

A state lawmaker who had previously backed proposals to tap into general revenue said he understands Hutchinson’s position, and said using those funds could be “problematic” given uncertainty about the tax cut proposals, ongoing efforts to try to tax online sales and other factors.

“We’re just in a state of limbo in the state right now in figuring out how we’re going to fund what where,” Republican Rep. Dan Douglas said.