Gov. Hutchinson signs ‘intermediate’ highway bill, also signs ‘efficiency’ bill

Gov. Asa Hutchinson signed a five-year highway bill into law Monday hours after it passed the Senate and said any longer term plan should come as a result of a voter-initiated act.

The bill will raise about $50 million a year over the next five years in order to make the state eligible for $200 million a year in federal matching funds.

Present at the bill signing were most of the members of the Arkansas Highway Commission as well as Arkansas Highway and Transportation Department Director Scott Bennett, who have said the state needs more money for highways.

Hutchinson described the five-year mechanism as an intermediate plan, saying, “I do believe that there’s a case that can be made for a long-term highway plan. These commissioners make that case every day to me.” However, Hutchinson said that a plan that perhaps would raise taxes for highway funding should be considered through a voter initiated act.

The bill signing occurred hours after the Senate voted 21-10 to pass HB1009 by Rep. Andy Davis, R-Little Rock. The emergency clause was then passed moments later, 29-3, allowing the bill to go into effect July 1.

The bill would create the Arkansas Highway Improvement Plan of 2016, which would be funded by an Arkansas Highway Transfer Fund. For 2017, the state would make a one-time transfer of $40 million in rainy day funds to the Highway Transfer Fund. In the future, the Highway Transfer Fund would be financed by deposits of 25% of state surplus funds. A 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 dedicate to highways money generated by diesel taxes as well as revenues from the half-cent sales tax passed by voters in 2012. Some of those tax dollars go into general revenues.

BILL HISTORY
The bill passed after two days of legislative maneuvering last week. On Thursday, the Senate version, SB11 by Sen. Bart Hester, R-Cave Springs, failed to pass the Senate Transportation Committee, so Hester decided to move the House version to the Senate Revenue and Taxation Committee, where it passed Friday. Also Friday, the House passed that version.

Among those voting for the bill Monday were Sen. Bill Sample, R-Hot Springs, and Sen. Greg Standridge, R-Russellville. They were among a group of four senators who had proposed a motor fuels tax that would rise to 8 cents per gallon to fund highways.

During the debate Monday, Sen. Keith Ingram, D-West Memphis, denounced the bill on the Senate floor. He said it doesn’t offer a long-term solution for the state’s highway funding needs and that the state is putting off expenses that will grow over time.

“We can spend dimes now that will save dollars in the future,” he said.

Ingram said the bill wasn’t provided to members until the day of the session call and doesn’t actually rely on surplus funding because the money inevitably will be carved out beforehand. He compared the legislative contortions undertaken to pass the legislation to a gymnast or to a baseball catcher trying to catch a knuckleball.

In the bill signing ceremony, Hutchinson responded by saying, “Sen. Ingram is really not making a good argument there.” He said the state passes conservative budgets and has averaged a $48 million surplus each year over the last 10 years. Another positive: Dedicating surplus funds to highways reduces money for legislative general improvement fund projects, he said. Some criticize those GIF projects for being too specific and politically based.

OTHER SESSION LEGISLATION
Following are other bills passed by the Legislature this session.
• A bill that restored the original sunset date of Dec. 31, 2021, for Arkansas Works, the state program that uses federal Medicaid dollars to purchase private health insurance for adults with incomes up to 138% of the federal poverty level. As of the end of January, 267,590 Arkansans were eligible for coverage.

Under legislation passed during the recent fiscal session, the program was set to expire at the end of this year, but Hutchinson vetoed that date as part of an arrangement with Republican senators who oppose the program. At the time, Arkansas Works had majority support as a policy but fell just short of the three-fourths majority needed for funding. When the Legislature failed to override the veto, the 2021 ending date stood. The new bill was meant to ensure the later ending date survives any legal challenge.

• A bill closing the Workers’ Compensation Commission’s Death and Permanent Total Disability Trust Fund to new claims, and to eventually end the fund completely. The fund provides benefits to seriously injured employees and dependents of those killed on the job, but it has $130 billion in unfunded liabilities and is on pace to become insolvent in six to eight years. The legislation closes the fund to new claims on June 30, 2019, while existing claims are slowly paid down over decades. Meanwhile, new claims will be handled by employers and their insurers.

• The Frank Broyles Publicity Rights Act of 2016, which is meant to protect likenesses, images and signatures of individuals from unauthorized commercial use. The bill was inspired by such attempts related to former University of Arkansas Athletic Director Frank Broyles.

• A bill requiring school and general elections held in November to be on the same ballot and in the same polling place.

• A bill prohibiting the Department of Education from declaring any schools to be under academic distress for one year, and to suspend school ratings over that time. The bill is meant to give schools and the state Department of Education time to adjust to new accountability measures required by the federal Every Student Succeeds Act.

• A bill by Speaker Jeremy Gillam, R-Judsonia, and Sen. Terry Rice, R-Waldron, that eliminates certain task forces and reduces paperwork burdens for foster care caseworkers.

That bill offered the day’s only drama, as it initially failed in the Senate, 17-8. However, the vote was expunged. A supporter, Jason Rapert, R-Conway, was stuck in traffic, and supporters had not used a tactic known as “pairing votes” to let absent senators vote. After the expungement and Rapert’s arrival, the bill passed 19-10-1.

• Aside from the highway bill, the government efficiency bill was the session’s most controversial. Opponents complained that the 105-page bill was too broad and arrived at their desks too late to give it proper consideration. Among its provisions is one moving the Arkansas History Commission into the Department of Arkansas Heritage. Hutchinson defended the move at the highway bill signing by saying it will increase accountability by placing the commission under him, an official elected by all Arkansas voters.

U.S. Sen. Tom Cotton, R-Ark., last week said in a speech that the United States does not incarcerate enough criminals. In his press conference, Hutchinson said that Arkansas is maintaining the right balance at the state level.

“I believe we actually have it close to pretty right in that we are sentencing to prison those that are violent, those that are repeat offenders, habitual offenders, those that pose a risk to society,” he said.