House committee advances highway tax extension, discusses constitutional proposals

An Arkansas House committee on Wednesday (Feb. 27) advanced a proposed constitutional amendment permanently extending a half-cent sales tax for highways.

The House State Agencies & Governmental Affairs Committee advanced House Joint Resolution 1018 by Rep. Jeff Wardlaw, R-Hermitage, by a voice vote.

The amendment would raise about $205 million annually as part of a $300 million highway package promoted by Gov. Asa Hutchinson. The governor briefly visited the committee room before the meeting started but did not stay for the bill’s presentation.

It next will be heard by the full House before moving to the Senate, where it has 15 co-sponsors.

If it passes, voters would vote on permanently extending the half-cent sales tax in November 2020. The tax was approved by 58% of the voters in 2012 and expires in 2023.

Legislators can refer up to three amendments to the voters. Afterward, Rep. Dwight Tosh, R-Jonesboro, the committee’s chairman, said HJR1018 is expected to be the one offered by the House. The Senate will offer another. The third is expected to originate in the House with approval by the Senate.

“The committee’s bipartisan decision to support referral of the half-cent sales tax extension to a popular vote is an important step in our overall transportation plan,” said Gov. Hutchinson. “It would be wrong to deny the people the final say-so on the sales tax that the voters approved, but that is set to expire. I applaud Chairman Tosh for allowing a full debate, and I am thankful the committee voted by a substantial margin to adopt this amendment.”

On Tuesday, the House Revenue and Taxation Committee advanced the other part of the governor’s highway package, Senate Bill 336 by Sen. Terry Rice, R-Waldron. It next faces a full House vote before going to the governor’s desk. It would raise $95 million through a 3-cent wholesale sales tax on gasoline, a 6-cent wholesale sales tax on diesel, additional registration fees on electric and hybrid vehicles, and by dedicating to highways $35 million in casino revenues and, if necessary, general revenues.

Arkansas Department of Transportation Director Scott Bennett told committee members Wednesday the package would fund maintenance on 10,000 of the state’s 16,000 highway miles, plus fund capital improvements. He said only 18% of the state’s highways are in good condition, and many bridges are weight-restricted. He said the department hasn’t seen a permanent tax increase since 1999.

“I have said many times over … the last few years, that if something’s not done to give us a permanent and sustainable source of revenue for highway investments, then my job becomes to manage the decline of the highway system, and that’s what we’ve been having to do over the last several years,” he said.

The half-cent extension would maintain the traditional split between highways, cities and counties. The highway network would receive 64% of the revenues, while cities and counties each would receive 16%. Bennett said cities and counties would see a 40% decrease in turnback funds in 2023 if the tax isn’t extended.

The rest would go to the Constitutional Officers Fund and the State Central Services Fund, which fund the state’s elected constitutional officers and other needs.

The bill passed on a voice vote, and no legislator requested a roll call. Before the vote, three legislators said they would vote no: Rep. Jim Dotson, R-Bentonville; Rep. John Payton, R-Wilburn; and Rep. Clint Penzo, R-Springdale.

Speaking in favor of the measure were Chris Villines, Association of Arkansas Counties executive director; Shannon Newton, Arkansas Trucking Association president; and Randy Zook, Arkansas State Chamber of Commerce president and CEO. Zook said the Chamber would have liked to have seen even more funding for highways and said his membership will enthusiastically support the campaign.

Also expressing support for the resolution were Jeff Pitchford, Arkansas Farm Bureau director of public policy & state affairs, and Marvin Childers, president and chief lobbyist for The Poultry Federation.

Ryan Norris with the state chapter of the anti-tax group Americans for Prosperity spoke against the bill.

Earlier, the Senate State Agencies & Governmental Affairs Committee heard testimony regarding three proposed amendments. Those included the Senate version of HJR 1018, Senate Joint Resolution 14 by Sen. Lance Eads, R-Springdale.

The committee also discussed Senate Joint Resolution 10 by Sen. Mat Pitsch, R-Fort Smith. That amendment would make it harder to amend the state’s Constitution in three ways.

• First, it would require petitioners to file petitions bearing the signatures of half the designated percentage of voters in three-fifths of the state’s counties, or 45. Currently, it’s 15 counties.
• Second, it would move the filing date for citizen initiatives from the current four months before the election to Jan. 15. Legal challenges would have to be filed by April 15 of the year of the election.
• Third, it would require a three-fifths majority of legislators to refer an amendment to the voters. It’s currently a simple majority.

Pitsch said the Constitution has been changed 20 times in the last seven election cycles, which is too many.

The House State Agencies & Governmental Affairs Committee also discussed SJR10 during a Wednesday afternoon meeting.

Senators also discussed Senate Joint Resolution 15 by Sen. Alan Clark, R-Lonsdale, which would limit legislators elected on or after Jan. 1, 2021 to 12 consecutive years of service in the House and Senate, with the ability to return to service after four years out of office. The amendment also would limit judicial terms, though Clark said he planned to remove that provision through an amendment.

House Joint Resolution 1020 by Dotson, which is the Senate version of Clark’s term limits amendment, also was discussed by the House State Agencies & Governmental Affairs Committee Wednesday afternoon.

Thomas Steele, chairman of Arkansas Term Limits, testified against the bill. Among his objections was a provision that would reserve for the Legislature the ability to propose to voters an amendment changing or repealing term limits.

Other proposed amendments discussed by the committee were:

– HJR1026 by Dotson, which would limit House members to four two-year terms and senators to two four-year terms. It also would limit future referrals for term limits changes to legislators.

– HJR1006 by Rep. Robin Lundstrum, R-Elm Springs, which would allow judges and justices to be elected on a partisan basis.