Gov. Hutchinson moves forward with highway funding working group

Gov. Asa Hutchinson signed an executive order Thursday (April 30) to create the Governor’s Working Group on Highway Funding, he told a group while speaking at the Arkansas Trucking Association’s Annual Business Conference and Vendor Showcase in Hot Springs.

The working group’s purpose is to involve the public in determining highway financing options. According to the order, the working group will make recommendations by Dec. 15.

The 20-member group will include the director or designee of the Highway Department, a member of the Arkansas State Highway Commission, designees from the Arkansas State Chamber of Commerce, the Arkansas Economic Development Commission, the Arkansas State Department of Higher Education, and others.

Hutchinson pledged to create the working group during the legislative session after the House Committee on Public Transportation voted to advance a bill that would transfer money out of the general fund to highways. Hutchinson opposed the bill but said he would create the working group, so the sponsor, Rep. Dan Douglas, R-Bentonville, pulled the bill. Douglas will be a member of the working group.

The order said the appointments would be made within six weeks of the order, which was dated April 23. Hutchinson later told reporters he planned to make the appointments by Monday.

REVENUE PROBLEM, TAX ISSUES
Hutchinson told the truckers’ group that solutions are needed because increasingly fuel-efficient vehicles are resulting in declining gasoline tax revenues. The federal fuel tax has not increased since 1993, and the state tax has remained the same since 2001.

Hutchinson said afterwards that he was not planning a special session on highways.

“We could wait until the next meeting of the General Assembly in regular fashion two years from now, or there might be an opportunity in between. We’ll just have to wait and see,” he told reporters.

Hutchinson said the working group needs a wide range of representatives from interests that receive funding from the general revenue budget, such as higher education, in order to reach a consensus. He said a model could be designed that would have no impact on the budget now but would find dollars in growth revenues in the future.

“I understand the conservative environment in which we live, and the fact that the taxpayers just had a half-cent sales tax for highway development,” he said, referring to the Connecting Arkansas Program passed by the voters in 2012.

FEDERAL FUNDING UNCERTAINTY
Hutchinson’s executive order comes one month before Congress’ highway bill, MAP-21, is due to expire, and the federal Highway Trust Fund that reimburses Arkansas for much of its highway construction is nearly out of money. Chris Spear, the American Trucking Associations’ vice president of legislative affairs, earlier told the truckers group that Congress will not be able to write a transportation bill in time and will have to create a short-term fix to buy time to write a long-term bill. If it doesn’t do so before the end of the year, a long-term bill might not happen until the end of 2017 because next year is an election year, he said.

The uncertainty caused by Congress’ inability to write a highway bill has already caused the Highway Department to cancel 60 projects totaling $162 million this year, AHTD Director Scott Bennett told attendees. Counting that amount, about $490 million is potentially at risk this year and about that same amount next year.

“I’m really, really happy that he took this step,” Bennett said about the executive order in an interview. “I think it shows a lot of leadership on his part, and it shows that he really does recognize what the problem is, and he wants to make a difference.”