Governor: Highway Funding Group To Meet, Baird To Chair

The Working Group on Highway Funding will have its first meeting June 24, and Gov. Asa Hutchinson’s former budget director, Duncan Baird, will serve as chairman.

Hutchinson made both of those announcements during a meeting of the Arkansas Good Roads Transportation Council Thursday. He also announced that Baird would be moving to the Department of Finance Administration to serve as budget administrator.

The 20-member task force includes a cross-section of Arkansans, including representatives of the trucking industry, the Arkansas State Chamber of Commerce and higher education.

As Hutchinson described it, “If you look out in the committee, the working group, many of them are pro-additional funding for highways. In fact, they probably outnumber those that are a little bit more concerned by five to one. But let me tell you, Duncan Baird as the budget guy is going to hold his own very well.”

The Arkansas Highway and Transportation Department faces a backlog of projects coupled with uncertain federal funding. The federal Highway Trust Fund, which pays for 70% of state highway construction, is scheduled to become insolvent in August, and Congress has yet to create a reliable funding mechanism to strengthen it. The uncertainty has led AHTD to cancel 70 projects worth $280 million this year.

Hutchinson created the working group after a bill by Rep. Dan Douglas, R-Bentonville, that would have transferred some general revenues to highways passed the House Committee on Public Transportation during this year’s legislative session. Hutchinson opposed the bill because it didn’t fit into his budget, so Douglas pulled the bill. Douglas is a member of the working group.

Hutchinson said the task force should pay particular attention to four options: a vehicle miles traveled tax, where drivers are assessed taxes based on the miles they drive; toll roads; a close examination of the role of local governments; and public-private partnerships.

Highways are funded mainly through state and federal fuel taxes. The federal fuel tax has not been increased since 1993, while Arkansas’ fuel tax has not been increased since 2001. Hutchinson did not rule out a fuel tax increase pending the task force’s recommendations but said afterwards, “I didn’t come into government to raise taxes. I came to manage government well.”

He said in his speech that he is looking at creating more revenue long term by changing the funding formula, perhaps by tying it to something like the consumer price index.

“I would like to see us really give close examination to a new funding model that starts very modestly,” he said. “I think that’s going to be the big debate is there will be many that will say we’ve got to have an immediate infusion because the needs are so great, but you have to deal in political reality, and the reality is you’ve got an anti-tax sentiment in terms of increasing taxes, and that you’re going to have to work through that.”

He said that governors have taken the lead or Legislatures are offering highway funding bills in 23 states.

“As I go to the National Governors Association, that’s the topic of discussion as to how all the states are doing it in different fashions,” he said.