Beebe to call for road bond renewal vote

Editor’s note: Roby Brock, with our content partner Talk Business, wrote this report. He can be reached at [email protected]

Gov. Mike Beebe’s spokesman Matt Decample said the governor will call an election to renew an existing $575 million highway bond program. The date of the election remains undetermined.

Decample said that the Governor had decided to seek renewal of a bond program that was started in 1999 and has financed significant improvements to the state’s interstate system. The bond renewal election would seek to maintain future federal highway funding as part of the debt retirement on an interstate bond program. Also, lawmakers passed a 4-cent diesel fuel tax increase in 1999 that is being used in conjunction with the debt relief.

If the bond renewal fails, then the program comes to an end once the current bond issue is retired. The 4-cent diesel fuel tax would stay intact whether the bond program is renewed or not, unless the legislature took new action.

"We have not yet determined when he may call the election," Decample tells Talk Business, adding that the election could be in the November 2012 general election or in a special election called sooner. "We have no time frame for making that decision," Decample said, but he indicated the call would be made "sooner rather than later.”

The Governor recently delayed an effort to ask voters to consider a 5-cent hike in the diesel fuel tax, after private polling showed a lack of public support for the measure.  The legislature had given the Governor latitude to call an election for consideration of the proposal as part of a larger roads program.

The Arkansas Trucking Association (ATA) issued a press release Friday (July 1) saying it supports the Governor’s call for the bond renewal program. It had previously asked Beebe to hold off on a special election for the 5-cent diesel fuel tax increase, citing the poll numbers.

The ATA also announced it will support the repeal of a new law that exempts commercial trucks and semitrailers from the state sales tax. That new law was enacted as part of a deal for truckers’ support of the diesel fuel tax hike, but with the cancellation of a potential election, lawmakers and Beebe had called for a reversal of the tax break.

“The sales tax exemption was based on the premise that it would be revenue neutral,” said Lane Kidd, ATA president. “But, without the diesel tax increase, we can find no other way to make the exemption revenue neutral, so our board of directors voted unanimously this week to support the Governor’s intention to repeal the exemption in the next legislative session. The exemption should not come at the cost of money for highways.”

“Voters can renew the current bond program without any tax increase and the trucking industry will continue to underwrite the major expense of maintaining our interstate highways for the next decade,” said Kidd.