Arkansas Highway Commission supports Gov. Hutchinson’s highway funding plan

The Arkansas Highway Commission has announced its support for Gov. Asa Hutchinson’s highway bill.

In a statement released Wednesday, the commission said it was “pleased that the call for the Special Session includes a plan from Governor Hutchinson to address our most critical, immediate need for additional highway investment. … While we have concerns about the sustainability of some of the proposed funding sources beyond the first year, we appreciate and support the Governor’s efforts on this critical, immediate issue.”

Hutchinson has called legislators into special session May 19 and plans to address them at 9:30 a.m. Thursday. The session’s purpose is to find about $50 million a year in state funds so the state is eligible for $200 million in federal funds.

The bill would create the Arkansas Highway Improvement Plan of 2016, according to a draft provided to Talk Business & Politics. Its primary sponsors are Sen. Bart Hester, R-Cave Springs; and Rep. Andy Davis, R-Little Rock.

It would create an Arkansas Highway Transfer Fund, which would be available to the Arkansas Highway and Transportation Department “in the event revenues to the department are insufficient to fully address the highway construction and maintenance needs of the state.”

To access the Highway Transfer Fund, the department would be required to request in writing that the governor propose a recommendation to the Legislative Council or the Joint Budget Committee to review and approve the transfer. The bill says that if a court finds the approval requirement is unconstitutional, the Highway Transfer Fund would cease to exist. The bill says the state would make a one-time transfer of $40 million from the Arkansas Rainy Day Fund to the Highway Transfer Fund.

In the future, the Highway Transfer Fund would come from deposits of 25% of state surplus funds. Deposits also would come from a Securities Reserve Fund consisting of savings created by the early retirement of nonhighway direct general obligation bonds, of discounts received through securities purchases, and of premiums and interest earned from the sale of securities in the state treasurer’s securities account.

The Securities Reserve Fund would generate $1.5 million for the Highway Transfer Fund in fiscal year 2017 and $20 million in the following years.

The bill also would increase funding for highways by requiring that proceeds from the half-cent sales tax passed for highways by voters in 2012 not be disbursed into the Constitutional Officers Fund or the State Central Services Fund, as they currently are.

The bill creates the Highway Commission Review and Advisory Subcommittee of the Legislative Council, which would consist of 20 members, with at least four from each congressional district. Its job would be to review Arkansas Highway Commission rules, but the legislation explicitly states that it would not have approval authority. The Highway Commission also would be required to report on the progress of all road construction projects costing at least $10 million. The reports would be made at least quarterly or as required by the subcommittee.

The Highway Commission supports that measure.

“Since adoption by the voters of Amendment 42 (the Mack-Blackwell Amendment) to the Arkansas Constitution in 1952, the Highway Commission has operated in an environment of greater stability with clear authority and responsibility. Part of that responsibility is to maintain open lines of communication with citizens and elected officials, especially members of the General Assembly,” the statement said.

“Establishing more formal review and communication procedures between the Commission and the Legislature promotes transparency and accountability for both bodies. We support efforts that help our elected officials and the public understand how we have been and are being good stewards of taxpayer dollars. Formal procedures for legislative review of Commission processes, as proposed for consideration in the Special Session, will be beneficial as long as they are applied within the confines of the Constitution.”

The bill also renames the “Arkansas Rainy Day Fund,” which can contain up to $125 million, as the “Long Term Reserve Fund.”