Consensus on plan is crucial, he says
By Michael R. Wickline, Arkansas Democrat-Gazette, Nov. 14, 2018
Gov. Asa Hutchinson said Tuesday that there is a lot of work to do to develop a consensus in the Legislature for a long-term highway improvement plan.
“My purpose of being here today is tell you that I am fully committed to a highway plan for Arkansas’ future,” the Republican governor told more than 100 people attending the annual meeting of the Good Roads Foundation in Little Rock. He pledged to work on such a plan as part of his re-election campaign.
That plan must include funds for maintenance, new construction and bridge rehabilitation, he said. It must reflect a consensus of lawmakers and officials from the executive branch, private industry and cities and counties, plus have public support, he said.
“We have to work diligently together over the next month in order to develop a consensus on the direction we are going to go and how we are going to present this to the Arkansas General Assembly, so you have got work to do,” Hutchinson said. “You need to be meeting with legislators. We need to be talking. We need to develop that consensus, and your support and commitment to that is critically important.”
Afterward, Hutchinson told reporters there are different ideas among lawmakers about financing a highway plan, “so we need to have time for all of us together to build a united approach on highways.”
He said it was “premature” to make a specific announcement and there’s “absolutely no agreement” on how much money should be raised.
“I have not arrived at a figure yet as to what it should be. That’s what I am working on,” he said. Several studies have estimated the state’s highway needs at more than $400 million a year.
The range of options include extending the 10-year half-percent sales-tax increase for highways that voters approved in 2012, Hutchinson said. That tax raises about $170 million to $180 million a year and expires in June 2023, according to state Department of Transportation Director Scott Bennett.
The state’s fuel tax is 21.7 cents per gallon on gasoline and 22.7 cents on diesel.
In the 2017 regular session, highway legislation sponsored by Rep. Dan Douglas, R-Bentonville, failed to clear the state House of Representatives. It would have asked voters to consider approving a bond issue to be financed by a 6.5 percent tax on wholesale fuel prices to raise an estimated $200 million a year.
Douglas said Tuesday in an interview that he believes a long-term highway plan needs to be funded through “a little bit of mixture of general revenue and some fuel tax increase, even with the sales tax or just a straight fuel tax increase.
“Trying to get enough [money] from any one place is problematic. I think it is too painful for the motorists out here. But we still got to do something to maintain our roads and it is going to take a lot of money to do it,” he said.
“There are many legislators that feel like we need to use some general revenue in any plan there and we need to try to pass something here. After all, we were elected to come down here and solve problems and make decisions and not just pass the buck all the time,” said Douglas.
Asked about his highway plan, Sen. Bill Sample, R-Hot Springs, said Tuesday in a text message to the Arkansas Democrat-Gazette that “we are developing a plan.
“But we are not even close to revealing it,” said Sample, who is chairman of the Senate Transportation, Technology and Legislative Affairs Committee.
During his remarks to the Good Roads Foundation, Hutchinson said state government is devoting $50 million a year in general revenue to match $200 million in federal highway funds under his 2016 highway improvement plan enacted by the Legislature.
“I think it would be a challenge to divert additional general revenues into the highway plan,” he said.
Diverting $400 million a year from general revenue to highways would amount to 7 percent of the state’s existing general revenue budget, and diverting that much money “would undermine our ability to fund teacher pay increases, state police enhancements and tax cuts as well,” Hutchinson said.
“I know there is talk in the Legislature that, well, just pass out a highway plan that will go ahead and create the revenue that is necessary, impose the taxes that are necessary for a new highway plan,” he said.
“I am open if the Legislature can come to me and show that there is a consensus to do that, then we can talk about it. I have been not seen that consensus that’s developed yet and that’s why I have talked about the concept of referring to the voters of Arkansas a highway plan that [they] can say yes or not to in 2020.
“But I know that we have got members of the General Assembly here that feel strongly that they can come together with a plan that they can pass out and I am looking forward to more conversations with them, more conversations with industry and developing a consensus on that point,” Hutchinson said.
Hutchinson said he would reveal his proposed general revenue budget and forecast for the next two fiscal years this morning to lawmakers.
“I won’t divulge all the details of it, but I will tell you that the budget tomorrow will reflect a commitment to teachers and education. It reflects a commitment to public safety and the necessity of investing in public safety, and then it will reflect our continued commitment to tax cuts,” he said. He said his proposed budget will deal with a projected $38 million reduction in revenue from voter approval of Issue 4, which cuts tax rates on Oaklawn Jockey Club and Southland Racing Corp. Issue 4 will allow the state Racing Commission to issue licenses for four casinos, including expansions of Oaklawn in Hot Springs and Southland in West Memphis. The other two casinos would be in Jefferson and Pope counties.