Ink Dries On Highway Plan As Legislators Eye 2017 For Changes

May 24, 2016

Outside the Arkansas House chamber in the state Capitol building.
Credit Jacob Kauffman / KUAR

Governor Asa Hutchinson’s five-year highway funding bill is now law but legislators are already looking to 2017 to make changes. The $50-million a year plan is largely funded by surplus and general revenue funds. A number of Republican lawmakers, as well as Democrats, desire as a more dependable, dedicated user-based funding source for a long-term approach.

State Representative Andy Davis sponsored the governor’s plan but says more highway legislation is expected in next year’s regular legislative session, “I don’t think this is the end of highway bills for five years.”

The Republican from western Pulaski County has previously floated the idea of a diesel tax increase coupled with an income tax cut. But Davis says there is no consensus – at this very early stage – on how a long-term plan will be structured.

“I think there’s not necessarily an appetite for a fuel tax but there is an appetite for more highway funding,” says Davis. “I think the only consensus is we need more funding. I don’t see a lot of consensus over how to get there.”

House Democratic Minority Leader Michael John Gray is among those looking to 2017 to implement a new funding mechanism for highways.

House Minority Leader Michael John Gray (D-Augusta) during the special session.
Credit Jacob Kauffman / KUAR

“The subject all last week was, ‘we’re going to pass this one and then we’re going to come back and do something later,” says the state representative from Augusta. “They called it a five-year plan but I don’t think anybody really wants this to be the plan five years out.”

Gray voted against the governor’s highway plan which for the first time in the state’s history will draw from general revenue rather than user-based or dedicated funding streams. He preferred a one-year solution offered by a Republican lawmaker that would have still raised the $50 million state contribution required to access $200 million in federal funds.

“I would have loved to have voted on Senator Jimmy Hickey’s one-year plan. It would have given us more time,” says Gray. “Now, if we run into any kind of political wall we’ll default to this plan. I would have much rather seen a plan like Senator Hickey’s that was basically the governor’s plan but only a one-year solution.”

The plan by Sen. Hickey of Texarkana passed in a Senate committee on the first day of the now-concluded special session but stalled after the governor’s plan advanced in the House.

Rep. Davis wants to consider changes geared toward long-term funding but he says sticking with the governor’s plan in 2017 could also be a prudent option.

“I’m pleased that even if the Legislature can’t get more comprehensive funding in the next session this bill is permanent so we’ll still have this,” said Davis.

Fellow Republican state Representative Bob Ballinger expects changes in 2017’s lengthier, regular legislative session but thinks they’ll be relatively mild.

“Over time we’ll be seeing more and more of tweaks to get together a long-term plan. I would bet it would be some small increase on diesel because the truckers association is okay with it. That would be offset by an income tax cut,” says Ballinger. “But honestly who knows.”

The idea of raising a fuel tax only if it corresponds with a tax cut elsewhere is popular among a set of Republican lawmakers with an interest in creating new revenue for highways.  Davis called his pre-session idea for a higher diesel tax an overall “tax reform” rather than a “tax increase.”

Rep. Gray doesn’t have a concrete funding solution to offer on behalf of House Democrats but says any split ticket fuel tax-tax cut bill should offer relief to working Arkansans.

“Let’s all be mindful that the tax cuts that just [2015] went through the Legislature netted only $75 in actual cuts to the bulk of Arkansans that make between $25,000 and $65,000 a year.”

Prior to the special session Davis said he’d likely offer his tax cuts to top income brackets and businesses impacted by the diesel tax like towing and trucking companies.