Highway Development a Must in Arkansas

 

A number of highway-related developments took place recently, and though they were only loosely related, they help illustrate the economic stimulus conundrum.

Arkansas Business recently reported that while development of the Fayetteville Shale Play had created much-needed jobs during this recession, the natural gas formation hadn’t lived up to its promise. Part of the formation not living up to its promise means that severance tax revenue hasn’t been nearly enough to pay for damage done to Arkansas’ roads by the industry that is exploiting the play.

Meanwhile, the American Association of State Highway & Transportation Officials called for a multibillion-dollar investment in the nation’s rural roadways, linking highway expansion to a more robust economy. Arkansas, a largely rural state with the 12th-largest highway stem in the United States, would benefit greatly from more and better highways.

And Caterpillar Inc. opened its $140 million road grader plant in North Little Rock. Caterpillar, which laid off thousands of workers last year, nevertheless was able to follow through on its plans for the North Little Rock facility because federal stimulus money had resulted in greater demand for the graders to build, yes, highways.

So which comes first? Better highways or a better economy? Can we wait until the economy improves to improve our roadways, or will improving our roadways better the economy? “It’s a puzzlement,” sang the king in “The King and I.”

The state of Arkansas knows we need to improve our roadways. That’s why the Legislature created the Arkansas Blue Ribbon Committee on Highway Finance last year. Its purpose is “to define an equitable and adequate system that will properly finance improvements to Arkansas’s system of state highways, county roads and city streets.”

Arkansas’ primary highway financing source is the 21.8 cent-per-gallon motor fuel tax, but revenue from the tax has stayed relatively flat, so the committee is seeking alternative funding sources.

The committee released an interim report July 1 that broached a number of potential financing options. Among them were a bond issue to be retired through a half-cent general sales tax and a new excise tax on the wholesale price of motor fuels.

The committee hasn’t yet reached consensus on these and a variety of other suggestions, though final recommendations are planned on or before Dec. 1.

New taxes are never popular. They could be downright distasteful during a recession. However, a strong road network is essential to a strong economy, particularly in Arkansas. And the Blue Ribbon Committee counts among its members people like Madison Murphy, hardly a tax-and-spender.

We plan to carefully consider its recommendations, when they come, knowing they weren’t made lightly.