House tax panel chair clarifies highway funding streams; Senate Minority Leader says ‘dark money’ bill likely

A key House Republican and a Democratic Senate leader both expect a highway funding plan to come out of the current legislative session, but its multiple components are still fluid.

Rep. Joe Jett, R-Success, chairman of the House Revenue & Tax Committee, said that a consensus highway funding program will be crucial to Gov. Asa Hutchinson’s hopes for a $97 million tax cut effort to bring the state’s top rate down from 6.9% to 5.9%.

“I think there’s a 99% chance that we’re gonna get something done,” said Jett, who appeared on this week’s edition of Talk Business & Politics with State Senate Minority Leader Keith Ingram, D-West Memphis.

“I think there is a growing will to do it. Rep. Jett and I have discussed, and you can see in the income tax [debate], how the transportation plan has come into play. Again, what I hear from people at home is not that a $12 tax cut is a major issue but the roads are,” said Ingram in reference to a $12 tax break that will benefit those making $50,000 under the governor’s tax cut plan.

While estimates for highway funding have ranged from a $200 million plan to a $500 million plan, Jett said he thinks the package the governor may announce on Monday will be in the $300 million range.

Lawmakers are looking at a 10-year extension of a current half-cent sales tax for roads that will expire in three years. Jett and Ingram confirmed that legislators are also eyeing registration fees on alternative vehicles, such as electric cars, as well as raising the gas tax on diesel fuel and unleaded fuel. A registration fee on electric cars might only bring in $3 million today, but as they grow in popularity they could raise more revenue. A gas tax on unleaded fuels brings in about $15 million per penny, according to Jett, while a penny increase in diesel fuel taxes raises about $6 million.

Some legislators have insisted that any form of highway funding plan would need to be referred to voters for approval — something Ingram and Jett expect — and their peers have called repeatedly for more transparency from the constitutionally independent Highway Commission.

Ingram said he hasn’t had problems with the agency’s disclosure of information.

“I think that they have done a good job in coming in front of the joint committee and talking about every project that’s over $10 million and showing where the money’s going. So at the end of the day, I think they’ve done a very good job of justifying the need and showing where the money’s being expended,” he said.

Jett said some lawmakers may want a portion of the state funding they have traditionally controlled to route through the Revenue Stabilization Act to have a better accounting of how highway dollars are being spent.

“I think you’d see some of the new funding probably go back through RSA, so that way the legislature can control some of the funding going back to the Highway Department,” Jett said.

Ingram said the state is missing a prime opportunity to capture revenue and earmark it for highways. He’d like to see the collection of sales taxes on Internet purchases allow for general revenues on road-related items, such as tires or batteries, to be tabbed for highway funding.

“It’s the one opportunity that our governor had that would have additional new revenue coming in that we could put that into general revenue, then move automobile-related [items] — batteries, tires, things like that — out of general revenue and let the highways have it because they’re the users,” Ingram said.

Jett said estimates on money that may come in from Internet sales tax collections are hard to estimate and should be reserved for some additional corporate tax corrections that may be required due to federal laws.

“Right now, the talk is putting it back into the net operating loss carried forward, the corporate tax cuts if you will, coming forward. We’re gonna probably put those together,” he said.

ETHICS & DARK MONEY
Ingram has also been instrumental in working on a bicameral, bipartisan package of bills related to ethics reform at the state capitol. In the wake of a long-running public corruption scandal that has snared members of both political parties, legislative leaders have cobbled together an ethics reform package that addresses several key areas.

The package includes a measure that prohibits elected officials from serving as lobbyists and having multiple political action committees, or PACs; raising the maximum fine for ethics violations; and increasing the penalty for using campaign funds for personal use.

The proposals also include a measure to prevent lawmakers from getting contributions from multiple PACs; and a so-called retirement “clawback” provision for lawmakers who commit felony crimes as elected officials. A final proposal would support a request by the state Ethics Commission to change appropriations for the upcoming fiscal year to include funds for two additional staff positions and a $186,000 increase in the agency’s operating budget.

Ingram said that while these reforms may not stop all of the illegal activity of the past, it will help deter future abuses.

“I think it’s a start. I think that the only way that you clean up the image is walk the walk and talk the talk. And that’s not going to be restored easily,” he said. “It’s going to take a long time to rebuild the trust, but these are steps that are going to have to be taken.”

Ingram said he expects another push in this session for a measure to address “dark money” spending, which refers to campaign advertising that comes from third-party groups who don’t have to disclose their donors like candidates and PACs do.

“I think the people of Arkansas were appalled at the judicial race last year, the outside dark money that came into our state,” Ingram said. “As we know now, more and more we see on a global basis people trying to influence elections and we have no clue. I would like to think that there will be a dark money bill that will be introduced… in this session.”

Jett said he thinks the General Assembly would give it serious consideration in light of how the money has been used in a variety of races.

“I think it stands a good chance [for passage]. Like the senator said, I think a lot of people are just tired of outside money coming in trying to buy our elections, so I think it stands a pretty good chance,” Jett said.

You can watch their full interview in the video below.