House Panel Passes Bill Diverting Funds For Highways

A bill that would take $2.8 billion from general revenues over 10 years and dedicate the money to highways passed the House Committee on Public Transportation on a voice vote Thursday.

House Bill 1346 by Rep. Dan Douglas, R-Bentonville, would dedicate funding from the sale of new and used cars and car parts to roads. Seventy percent would go to highways, 15 percent to counties, and 15 percent to cities. The funding would increase over time so that it would grow from $35 million in year one to $548 million in year 10.

The bill is meant to address a funding shortfall over the next 10 years of more than $16 billion, according to Scott Bennett, director of the Arkansas Highway and Transportation Department. The transfer would occur each year only after $2.2 billion has been raised through sales tax collections.

The transfer of funds was not included in Gov. Asa Hutchinson’s budget. Larry Walther, his newly appointed Department of Finance and Administration director, testified against the bill, saying it would cannibalize current state funding. He said the Highway Department should request funding on a year-by-year basis like other state priorities.

A spokesman for Hutchinson said the governor does not support the proposal as it threatens a balanced budget.

“While the Governor recognizes the need for improvements in the highway funding formula, he cannot support a bill that undermines the current balanced budget and doesn”t provide a consensus on a solution to the funding gap,” said Hutchinson spokesman J.R .Davis.

Douglas and Bennett touted the bill as a necessary means of funding highway needs that no longer are met by the fuel tax, which has not been raised nationally since 1993 and in Arkansas since 2009. Arkansas voters in 2011 did support online casino canada a bond issue through the Interstate Rehabilitation Program (IRP) as well as a sales tax in 2012 that funds the Connecting Arkansas Program (CAP). Together, those will cover 630 miles, or less than 4 percent of the state’s roads.

Insufficient funds forced the Highway Department to cancel this year’s overlay program – historically $50 million. Overlaying roads costs $200,000 a mile, while reconstruction costs $1.5 million a mile.

Bennett said the IRP and CAP programs are temporary, whereas this would provide a permanent funding source. He said the Highway Department would not be looking for an additional tax increase if it passes.

Testifying against the bill were Rich Huddleston with Arkansas Advocates for Children and Families, Pathfinder’s Dusty Maxwell, and Bill Stovall with the Arkansas Community Colleges. Other groups were signed up to speak against the bill, but did not have a chance to address the committee due to time restrictions.

Stovall’s opposition came despite the fact that the bill would take severance tax collections away from the Highway Department so all two-year schools could reach at least 75 percent of targeted funding. The bill also would provide funding for career and technical education programs.

Also speaking for the bill were Randy Zook, president and CEO of the Arkansas State Chamber of Commerce; Don Zimmerman, director of the Arkansas Municipal League; and Frank Scott with the Arkansas Highway Commission. Zook said the bill was not perfect but described it as the “best looking horse in the glue factory” for funding highways.