AHTD’s Bennett: State Should Become More Self-Reliant

Arkansas may need to prepare to receive less highway funding from Washington and rely more on money it raises itself, Arkansas Highway and Transportation Department Director Scott Bennett said earlier this week.

During a meeting with members of the American Council of Engineering Companies of Arkansas on July 15, Bennett said Congress’ inability to fund highways means, “We’ve got to keep making that transition to where we’re relying on it less and less, and there are a lot of states that have done that. Some states only rely on it for about 20 to 30 percent of what they do.”

About 50 percent of Arkansas highway dollars comes from the federal government, but federal dollars pay for 70 percent of state highway construction.

Some in Washington favor “devolution,” or funding highways primarily at the state level. Bennett said that approach makes some sense, but not with the interstate highway system or with national highways. Arkansas has 600 miles of interstate roadways as well as U.S. highways including U.S. 71 in western Arkansas and U.S. 412 across the northern part of the state.

“You look at Arkansas and our interstates, especially Interstate 30, Interstate 40, we’re a bridge state,” he said. “A lot of the traffic you have on those interstates is not necessarily generated in Arkansas. It’s coming across Arkansas, and we need to have a way to be able to have funding from the federal level that’s generated from all over the country to be able to pay for highway improvements here.”

Bennett said the fact that Arkansas can’t rely on Washington was one of the selling points of the Connecting Arkansas Program, the $1.8 billion highway construction program passed by voters in 2012 and funded with a half-cent sales tax.

Bennett’s comments come as Congress is debating how to fund highways. The current highway bill, MAP-21, is set to expire at the end of August, but the Highway Trust Fund will be empty by the beginning of that month.

The House voted July 15 to extend MAP-21 through May 2015 and to shore up the trust fund using a “pension smoothing” provision allowing employers to delay contributing to pension plans, thus raising their taxable incomes. The bill also would increase customs user fees at ports and would transfer $1 billion to highways from the Leaking Underground Storage Tanks account. Among the criticisms of the arrangement is that it provides less than a year’s worth of extra transportation funding using revenues from the future. All four Arkansas House members voted for the bill.

Passage of the bill gives state highway departments the assurance of an extra 10 months of federal funding. Typically highway bills last five or six years, but MAP-21 was only a two-year provision.

“It would keep us operating, but it still doesn’t let us plan for the future,” Bennett said. “I mean, we’re in the middle of trying to develop our next four-year highway program, and we don’t even know if or how much money we’re going to have starting in October of this year. So it really makes it difficult to plan for the long-term. With the time it takes to develop and implement highway projects, we need a longer term authorization bill, and we need a longer term funding solution.”

The primary means of funding highways at the national level, the fuel tax, has not been raised since 1993 and was not indexed to inflation. Cars have become more fuel efficient, which means drivers are paying less in taxes to drive the same roads, which are becoming more expensive to maintain. Meanwhile, travel has increased.

“The fuel tax doesn’t necessarily do it anymore,” Bennett said. “You know, it’s based on consumption, and it’s a national goal to reduce consumption of fuel and reduce our reliance on oil, and that’s about 80 percent of our highway revenue (that) comes from motor fuel sources. So there’s got to be something done that will be a major change in the direction of how highways are funded.”