House advances highway fuel taxes, amendment

The twin pillars of Gov. Asa Hutchinson’s highway plan – a fuel tax increase and an extension of the half-cent sales tax – moved another step closer to passage Monday (March 4) with both winning support in the House of Representatives.

Together, the two bills would provide about $300 million annually to state highways and another $110 million to cities and counties.

After the votes, Gov. Asa Hutchinson stepped into the Capitol pressroom, flashed a thumbs up, and said, “We got a highway bill through. It’s been a good day.”

House Joint Resolution 1018 by Rep. Jeff Wardlaw, R-Hermitage, would ask the voters to pass a constitutional amendment in 2020 permanently extending the 10-year half-cent sales tax voters passed in 2012. That tax is set to expire in 2023.

It would raise about $205 million annually. The resolution passed 66-29-4. It had the support of 45 Republicans and 21 Democrats.

Legislators can refer up to three proposed constitutional amendments to voters. The measure now goes to the Senate State Agencies and Governmental Affairs Committee.

Sen. Ronald Caldwell, R-Wynne, the committee’s chair, said HJR 1018 could be heard in committee as early as Wednesday (March 6) after the Senate adjourns.

Asked about the resolution’s chances in the Senate, Sen. Bart Hester, R-Cave Springs, a member of that committee, said in a text, “100% I think.”

Meanwhile, House members passed Senate Bill 336 by Sen. Terry Rice, R-Waldron, 70-25, with 3 not voting and 2 voting present.

The bill would raise another $58 million per year by enacting a wholesale gas tax that would be the equivalent of 3 cents per gallon, and it would do the same on diesel fuel that would be the equivalent of 6 cents per gallon. That tax could increase by a maximum of one-tenth of one cent per year.

It would raise a minimum of $35 million from new casino tax revenues, restricted reserve funds and other general revenue sources. Voters passed a constitutional amendment in November allowing four casinos to operate in Arkansas.

Finally, it would raise almost $2 million by imposing additional fees on users of hybrid and electric vehicles.

The measure had the support of 48 House Republicans and 22 House Democrats.

The bill now returns to the Senate, which has already passed it, to concur in an amendment removing Rep. Brandt Smith, R-Jonesboro, as a co-sponsor.

The bill survived a maneuver by Rep. Julie Mayberry, R-Hensley, who questioned on the House floor if it would require a three-fourths majority to increase an existing tax, versus a simple majority required to pass a new tax. Mayberry also questioned if the bill required an emergency clause.

The House recessed, and the House Rules Committee voted without objection that the taxes were new based on the advice of Paul Gehring, Department of Finance and Administration assistant revenue commissioner.

Gehring said he had addressed concerns similar to Mayberry’s on five or 10 occasions. He said only one case substantially dealt with the issue, a 1939 case, Caldarera v. McCarroll, Commissioner of Revenue.

On the House floor, Rep. Marcus Richmond, R-Harvey, urged lawmakers to pass the bill, saying, “This is as close as we’ve ever been of having a highway bill. If this one doesn’t pass, you’re not going to get a highway bill, and you’re going to have to go back home and explain why.”

Editor’s note: Talk Business and Politics’ Wes Brown contributed to this report.