A draft of President Trump’s infrastructure plan leaked two-and-a-half weeks ago is “very much a rich get richer plan” that wouldn’t result in large amounts of money for Arkansas, Department of Transportation Director Scott Bennett said Thursday.
Bennett made his comments to the Arkansas Legislative Council’s Highway Commission Review and Advisory Subcommittee.
The memo describing the plan’s framework was leaked Jan. 22, but the White House has said it will unveil its full $1.5 trillion plan Feb. 12.
According to the leaked memo, the plan would include a mix of federal funds whose purpose would be to incentivize state, local and private investment.
Half of the federal funding would come from an infrastructure incentives initiative that would require new sources of funding for matches. That would mean the half-cent sales tax passed by Arkansas voters in 2012 to fund the Connecting Arkansas Program wouldn’t qualify, Bennett said. According to the memo, another 10% would fund transformative projects too risky for the private sector. Bennett said Arkansas doesn’t have any of those projects. About 15% of the plan involves financing options.
Speaking to legislators and to Talk Business & Politics afterwards, Bennett said Arkansas would not be able to benefit much from these parts of the plan because of the emphasis on private investment, which often includes toll roads. Those require more traffic than is available in most parts of Arkansas.
The effect of the plan would be that the money would go mostly to population centers.
“They have the people. they have the traffic; they have the tolls,” Bennett told Talk Business & Politics. “They’re the ones that have been able to pass pretty substantial infrastructure plans – the East Coast, the West Coast, Texas, Florida.”
Bennett said privatization of highway construction “one way or the other is a financing program that you’re just going to have to pay off over time, and that is not a good way to do business.”
Arkansas would benefit from a rural infrastructure program that would comprise 25% of the Trump administration’s plan, according to the memo. However, the entire program would be split between various types of infrastructure, including water, broadband, and electricity. That would not leave enough for highways, Bennett said.
Bennett said the Arkansas Department of Transportation has shared its concerns with the state’s congressional delegation, which is well-placed in Washington on this issue. Reps. Rick Crawford and Bruce Westerman, both Republicans, serve on the House Transportation and Infrastructure Committee. Sen. John Boozman, R-Arkansas, serves on the Senate Environment and Public Works Committee.
At the request of Sen. Stephanie Flowers, D-Pine Bluff, committee members agreed to send a letter to the state’s congressional delegation echoing Bennett’s concerns.
Bennett told legislators that since 1980, highway revenues have increased at a much slower rate than the rest of the budget. That year, highways were funded at $139 million and were 14.4% of general revenues. Currently they are $450 million, or 6.6%. If highway revenues were still 14.4%, they would equal $931 million, which is virtually equal to what the Division of Legislative Audit recently reported was needed.
Bennett said the state will be responsible for funding more of its highways in the future. On its current path, the Federal Highway Trust Fund faces a 40% reduction after 2020.
Bennett’s testimony came after the Highway Commission voted Tuesday not to pursue a ballot initiative this year to raise money for highways.
Highway Commissioner Alec Farmer said in an interview after the meeting that commissioners believed too many of their potential financial supporters were already committed to a tort reform ballot measure that would limit legal judgments. A joint legislative committee is considering tax reform, and commissioners didn’t want to interfere with that work. Also, the Connecting Arkansas Program will be spending a billion dollars on construction this summer, and commissioners feared the optics of asking for funding at a time when so many orange barrels will be on the road.
Commissioners and the Department of Transportation will continue their push for more funding in advance of the 2019 legislative session. If legislators don’t find the money then, they will likely go to the voters in 2020.
“This is it,” Bennett said afterwards. “We’re coming up toward the end of the half-cent sales tax program. We’re staring squarely in the face of the federal Highway Trust Fund having a 40% cut after 2020. We’re staring square in the face of the administration saying that, ‘If you want more federal money, you’re going to have to invest more state and local money.’ This is really the time that we have to move.”
Bennett afterwards said the department has been encouraged by its meetings across the state and by a non-scientific survey that showed that 73% of respondents said they were dissatisfied with the condition of the state’s roads, and that 75% would support a revenue-generating program.
“People want more highway improvements, and they’re willing to pay for it, and we really think it is the Legislature’s responsibility to do that, so we think we want to give them one more shot at being able to address that issue,” he said.