Funding for roads called a ‘priority’

Governor: State must act on own

Gov. Asa Hutchinson is skeptical that Congress will be able to pass a highway bill, he told about 550 people attending the Arkansas State Chamber of Commerce’s 90th annual meeting Wednesday in Little Rock.

“I believe if we’re going to create new roads and opportunities in Arkansas, that we have to be able to set our own agenda,” Hutchinson said.

Hutchinson addressed four key agenda items facing the next session of the Legislature — transportation, taxes, teacher pay and transforming government.

“We want to have a priority for a new highway plan in Arkansas,” Hutchinson told chamber members gathered at the Statehouse Convention Center.

The new highway plan needs to raise $300 million to $400 million, he said. Hutchinson’s goal is that the state be able to maintain its existing roadways but also put more money into new highway and bridge infrastructure.

The state would see more impact from investments in highway projects like improvements to U.S. 412 in north Arkansas and the development of Interstate 49 in western Arkansas and Interstate 69 in

south Arkansas, he said.

“We can’t get it all done at once, but if we can have a highway program that puts money every year into new highway development and construction, then we can make progress,” Hutchinson said.

Finding a source of funding for those projects is the big hurdle for the state, said Michael Pakko, chief economist at the Arkansas Economic Development Institute at the University of Arkansas at Little Rock.

Pakko, who attended the state chamber meeting, said he agrees that the highway upgrades Hutchinson mentioned are priorities for Arkansas.

“But it doesn’t seem that the federal money is there,” he said. “And the state gasoline tax is becoming less and less of an adequate revenue source for those kinds of big expansion projects.”

The gasoline tax now raises less because vehicles have better fuel efficiency, he said. It has created a problem for transportation financing, Pakko said.

Hutchinson also said Arkansas needs more competitive income-tax rates.

The state already has reduced its income tax by $150 million each year, Hutchinson said. In his new budget, Hutchinson said, he asked for another round of tax cuts that would reduce the state’s tax rate to 5.9 percent over the next four years.

Hutchinson said he wants to raise the minimum pay for teachers by $4,000 over the next four years.

“We need to retain and keep the best teachers in Arkansas,” Hutchinson said.

It’s also important to continue the effort to transform state government, he said.

He wants to reduce the state departments that report to the governor from 42 to 15, Hutchinson said.

“We want to align the 200 boards and commissions into a department of labor and licensing,” Hutchinson said. “If it’s health-related, [put it into] a department of health.”