While Gov. Asa Hutchinson announced a $300 million plan for the state’s highways, that total does not include the additional funding the plan will provide to cities and counties. It relies on both an increase in the existing tax rates for gasoline and diesel, as well as an extension of the existing half-cent sales tax.
From the money raised by both of these sources, 15 percent goes to cities, while the other 15 percent goes to counties. From the new proposed tax rates, counties and cities will both get more than $13 million. Additionally, more than $80 million raised annually from the sales tax extension will be split between the two.
That leads to an annual total around $57 million from this plan for both cities and counties in the state. Chris Villines, the executive director for the Association of Arkansas Counties likes the plan. He says the increase in the tax rates is more of a catch up than an increase.
"We’ve seen that the gas and diesel taxes have lagged behind in growth and even remained stagnant while the needs for the roads and cost for road improvements go up. So we’re pleased with that being put out there as well," Villines said. While the extension of the gas tax is reliant on the approval of voters, Villines believes it will pass again.
"I think it was pretty overwhelming a few years ago that the voters of Arkansas think roads are important, not just for themselves and for their personal driving, but also for the economic development for the state," Villines said. According to Villines, the money that will go to each county depends on a formula that takes into account factors like population and mileage of roads, so the split will not be exactly even between counties. While this additional funding will help quite a bit, Villines says it is not enough to pay for all of the repairs the state needs.
"We have, I think 800 plus bridges that are structurally deficient or structurally obsolete that need to be repaired and replaced across the state. So it begins to help with those problems, but it will not be enough to fix those problems," Villines said. While he is not sure if the plan will encounter any obstacles in the legislature, Villines says the fact that over half of the senators have sponsored one of the highway plan bills is encouraging.
"What I saw last week is that 20 senators had signed on as co-sponsors on it. So I hope that everybody stands firm on the plan and we can get it through without much fanfare," Villines said. While the extension of the half-cent sales tax requires voter approval, the rest of the plan only needs legislative approval, with only a simple majority needed for the tax rate increase.