Car tags and carbon

by Paul Holmes (paulh@talkbusiness.net) 141 views 

And miles to go …

Is it too soon?

Too soon for what, you might ask. Too soon to be thinking about the November 2020 elections, of course.

If it seems that we just got past the Congressional mid-term elections six months ago, you’re right. But in just 18 short months we will elect a president after the major political parties nominate their candidates — the Democrats in mid-July of next year and the Republicans in late August.

A number of would-be nominees are already out there trying to attract the attention of voters and donors. By convention time, it may all be anti-climatic, though, because between now and then the contenders will likely have separated themselves from the pretenders in the two parties.

The national elections have the prospect of providing the nation much entertainment and the TV networks much cash in 2020, but closer to home, we have the prospect of interesting primary and general elections ourselves.

Before the General Assembly adjourned, both chambers approved a two-part package designed to raise additional revenue for the Arkansas Department of Transportation, the agency formerly known as the Arkansas Highway and Transportation Department.

Lawmakers passed a bill that would raise $95 million a year for state highways by imposing a wholesale sales tax on gasoline and diesel fuel, raising registration fees on electric and hybrid vehicles, and reallocating at least $35 million a year in state funding including tax revenue from casinos.

Cities and counties each would get $13 million from the tax. The wholesale sales tax is set to increase by three cents per gallon and the tax on diesel by six cents a gallon. The bill would allow increases of up to one-tenth a of a cent per year, meaning that maximum hike would be an additional one percent over a 10-year period. Beginning in October, it will cost the owner of an all-electric vehicle $200 more in registration fees and $100 for hybrid owners.

Gov. Asa Hutchinson proposed a two-part plan for raising more revenue for ARDOT, the catchy new name for the Arkansas Department of Transportation. The joint resolution passed by the Senate and the House will refer to voters in 2020 a constitutional amendment that would make permanent the state’s existing half-percent sales tax for highways. That tax was approved in 2012 for a 10-year period and is set to expire in 2023 unless the voters say yes at the November 2020 election. If renewed, the sales tax is expected to eventually raise $205 million for ARDOT and $44 million for the cities and counties annually.

At the time he signed the bill levying the wholesale sales tax on gas and diesel, Hutchinson said he believed the measure enjoys broad public support, but that it was too early to tell if the measure will fuel opponents for the legislators who voted in favor of it.

We’re reminded, particularly in presidential election years, that Arkansas is a small state. Indeed it is, but its roadway system is huge. Because of Arkansas’ rural nature, it takes a lot of asphalt to get from Point A to Point B. In fact, our state-maintained road system of about 16,000 miles is larger than those of the state-maintained systems of states whose populations dwarf ours — Illinois, New York and California, for example.

Those 16,000 miles of state and U.S. highways and Interstate highways in Arkansas represent about 15% of all public roads but carry three-quarters of the traffic in the state. There are about 50,000 miles of county roads and a similar number of miles of city streets. ARDOT staff and highway commissioners have said for years that the funding need far outweighs the available money with construction costs rising and revenues flat.

Many Arkansans must drive long distances over rural roads to get to work or school or to access health care or other services. Those who must make long commutes likely could point out some roads that need ARDOT’s attention along their routes.

By March, we may start to gauge how broad the support is for the governor’s package of highway funding. If fuel prices that were at the lowest levels in years just a few weeks ago continue to rise through next spring, some legislative incumbents who voted for the package may find themselves with opponents. One member of the House who represents a rural district explained a no vote by saying that “people in my district just don’t support” tax increases.

About those increased registration fees for electric and hybrid electric-fuel vehicles. The last time registration fees were raised was in 1979. Republican Frank White campaigned successfully in 1980 against incumbent Gov. Bill Clinton in part about those increased fees, as well as the decision by the federal government to send Cuban refugees to Fort Chaffee for resettlement.

University of Mississippi historian Brian S. Miller titled his 2006 book studying the election that White won over Clinton “Car Tags and Cubans.”

There are more than 2.5 million vehicles registered in Arkansas, but statistics from auto industry data provider Hedges and Co. indicate less than one percent are electric or hybrid gas-electric, so it seems unlikely that owners of these vehicles could turn an election.

“Car tags and carbon” just doesn’t have the same ring — but there’s the potential of a little buzz.

Editor’s note: Paul Holmes is editor-at-large for the Northeast Arkansas Talk Business & Politics. He can be reached at paulh@talkbusiness.net. The opinions expressed are those of the author.

Comments

comments