11/30/10-A governor-appointed panel is recommending a series of funding proposals to pay for road improvements.
Despite being a largely rural and agricultural state with a population that ranks 32nd nationally, Arkansas has the nation’s 12th largest highway system.
In order to address a gap estimated at nearly $15 billion during the next decade, the Arkansas Blue Ribbon Committee on Highway Finance has been working for nearly two years to find ways to meet road needs while coping with fewer fuel tax dollars prompted by more fuel-efficient vehicles and drivers traveling less.
Among the options that the 19-member panel is proposing to lawmakers and Gov. Mike Beebe to eat into that funding gap is indexing the excise tax on gas and diesel with a three-year trailing average of the Construction Cost Index.
Other potential funding sources include imposing a new excise tax on the wholesale price of motor fuels; putting to a public vote a 10-year highway bond program, which would be repaid with proceeds from a one-half cent sales tax increase; and rerouting some sales tax revenue on vehicles from the general revenue fund to roads.
The Owner-Operator Independent Drivers Association is concerned about the outlook for getting transportation projects completed.
“There’s a lot of frustration everywhere about the lack of federal leadership to produce a long-term authorization bill. Without a clear path forward, Arkansas and other states are forced to pursue various funding methods,” said OOIDA Director of Legislative Affairs Mike Joyce.
Joyce also pointed out that many of the methods pursued may not exactly benefit highway users.
“Unfortunately, efforts like this could become very commonplace,” he said.
All options for generating revenue have their detractors. Gov. Beebe has said he is leery of pursuing tax increases or revenue transfers to pay for road work, without a source to replace the lost revenue.
OOIDA is encouraged to see that there is a proposal to reroute transportation money from the general fund for new roads.
The highway panel acknowledges that it will be difficult for lawmakers to endorse tax increases during the regular session beginning Jan. 10, 2011, but they are calling on the state’s House and Senate members to at least look at their recommendations.