City, county and state officials along with chamber executives and business leaders offered Tuesday (March 10) their support to permanently extend a half-cent sales tax for highway projects.
More than 130 people attended the ninth of 12 meetings that the Arkansas Department of Transportation (ArDOT) is hosting across the state on the tax. Voters in the Nov. 3 general election will decide whether to extend a half-cent sales tax for highway projects. In 2019, Gov. Asa Hutchinson proposed a $300 million plan for highways, and later that year, the governor and other supporters of the tax extension launched a campaign for Issue 1 that will be on the November ballot.
If voters approve to extend the tax permanently, 76% of the money will go to system preservation, and 24% would be for capital and congestion relief. Under the governor’s plan, ArDOT could improve 7,300 of the 7,900 miles of Arkansas highways that carry 90% of statewide traffic daily. The program would create about 3,900 jobs annually and generate $8 billion in economic activity, Hutchinson said previously.
ArDOT Director Scott Bennett explained the benefits of extending the existing sales tax and what would happen if the tax were to fail. While the majority of the money would be used to preserve existing roads and bridges, about 50 proposed projects would be completed across the state, including the connector road to the Northwest Arkansas National Airport, two additional segments of the U.S. Highway 412 bypass and the widening of Arkansas Highway 112, between Fayetteville and Bentonville.
“There’s still a significant amount of work that can be accomplished up here if this issue passes,” Bennett said.
In the Fort Smith area, one of the proposed projects would be a two-lane segment to extend Interstate 49, between Interstate 40 in Alma and Arkansas Highway 22 in Barling. The 13.7-mile segment would also include a bridge over the Arkansas River. The two-lane segment would be part of a $540 million project that would be completed with the money from the sales tax. The money would also pay for another two-lane segment of I-49, between Greenwood and Y City.
East of Northwest Arkansas, U.S. Highway 412 would receive $100 million for projects between Huntsville and Black Rock. Bennett said the projects could be a variation of widening and the addition of passing lanes. A study is being completed to determine the best use of the funding there.
If voters don’t approve the sales tax extension, funding from the half-cent sales tax would end after June 2023, Bennett said. He explained over the past 40 years that motorists are traveling more miles, but this has not equated a significant rise in fuel tax revenue for highway projects in the state. Bennett said revenue has risen to $423 million, from $139 million in 1980.
Meanwhile, the cost for highway projects has risen, leading to a revenue shortfall for ArDOT. The highway department has identified $9.3 billion in project needs over the next 10 years and a $4.8 billion revenue shortfall. He said ArDOT can’t raise money for itself as schools and utilities can. In October 2019, a $95 million part of the governor’s $300 million plan went into effect. The half-cent sales tax issue that will come to a vote in November would allow for the $205 million annually in funding to meet the goal for the plan.
The plan would allow ArDOT to raise about $740 million annually for construction projects, and without the tax, the funding would fall about 30% to $535 million per year. As a result, ArDOT’s job would be to maintain the decline of the highway system, he said. Also, state turnback money to cities and counties would decline to $106 million per year, from $150 million annually.
Rep. Dan Douglas, R-Bentonville, supported the tax extension and said it’s a choice between good roads and tax cuts. Benton County Judge Barry Moehring said the loss of the tax revenue would lead the county to revert to only fixing potholes. Some residents were concerned about whether the tax would be spent properly and with regard to making the tax permanent.
Nelson Peacock, president and CEO of the Northwest Arkansas Council, said the organization represents 90 large businesses in the area, and the approval of the tax extension is its top priority this year. Graham Cobb, president and CEO of the Greater Bentonville Area Chamber of Commerce, who was speaking on behalf of the chambers for the largest five cities in Northwest Arkansas, was in support of the extension and said it was an economic issue for the area.
Kelly Johnson, chief operating officer and airport director for the Northwest Arkansas National Airport (XNA), explained how better access to the Highfill airport would bolster its economic impact on the region.
ArDOT also welcomed comments on the sales tax via a survey, which is available online. Link here for the survey.
Bennett said this would be his last public meeting on the half-cent sales tax as ArDOT director, but it won’t be the last one that ArDOT will host. Bennett recently announced he would retire March 20. Lorie Tudor will succeed Bennett.
When asked what he would be doing on March 21, Bennett said with a laugh, “whatever I want.”
The next ArDOT meeting on the tax is set for 5:30 p.m. March 30 at UACCB — Independence Hall in Batesville. The remaining meetings are 5:30 p.m. March 31 at First National Bank Arena in Jonesboro and 5:30 p.m. April 2 at El Dorado Municipal Auditorium.