Editor’s note: This is the weekly address from Gov. Asa Hutchinson.
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This week I wanted to visit with you about Arkansas highways. The facts are we have declining revenue for our highways and our needs are greater than ever. And then we need additional funds for Arkansas to access new federal money that has been made available in the recent federal highway program.
The new federal highway legislation will provide Arkansas with $200 million a year for new road funding, but it requires a match from the state. We need $46 million in matching funds by September of this year and an average of $50 million each year into the future.
After hearing from the Highway Working Group, members of the legislature, industry leaders and others, I have outlined a bold, yet realistic plan for funding Arkansas highways.
For the first time in our state’s history, we will make a meaningful contribution to our highways from general revenue funds, which in the past provided less than one percent of our highway needs. It’s important to note that my plan to use general revenue for highways will not reduce available funding for other critical needs like education, child welfare, criminal justice and more.
But a key part of the plan is that we will NOT raise taxes to fund our highways. Specifically, there will be no new taxes on gasoline, diesel fuel or sales tax. With our economy still on the mend and with families who are still struggling to make ends meet, now is not the time to raise taxes.
This new program allows us to access billions of dollars in federal highway money – all without raising taxes.
In the first year of my highway plan, Arkansas will primarily use unobligated surplus funds to provide the federal match of $46 million. In later years, the highway program will generate revenue from road user items such as a portion of existing sales tax on new and used cars. This will not raise or change the taxes Arkansans already pay on vehicles they drive. It will be phased in over time and capped at $25 million. There are other sources of revenue involved as well, but none will affect taxes or our ability to meet our budget obligations.
My final recommendation is using 25 percent of our budget surplus each year for highways. This will be done after education and our other critical budget needs are met.
Highway infrastructure is key to our state’s economic development and growth, and this plan should act as a catalyst for that growth by allowing us to increase our investment in highways without placing an unnecessary burden on Arkansas taxpayers. The plan I presented accomplishes both objectives.
Everyone wants effective and accessible roadways in Arkansas. These highways help people get to work on time, visit loved ones and travel our incredible state. They also provide avenues for our farmers and businesses to transport products across the state for increased economic growth.
I recognize that this critical need must be addressed, but I also understand the financial burdens we all face in today’s economy.
This plan is adaptable and it is realistic for Arkansas. And those are two factors I am confident will make it sustainable for years to come. The plan follows my conservative approach to governing and to budgeting, regardless of our ever-changing economy.
Arkansans and their families matter, and that’s why this highway plan is necessary and will help create better jobs and add to our quality of life.