Arkansas governor signs bill to secure additional road revenue

By Keith Goble, Land Line state legislative editor | 6/1/2016

Gov. Asa Hutchinson got what he wanted: a new law to boost Arkansas’ highway funding with revenue already available to the state.

Previously HB1009, the funding deal will raise $50 million annually for roads and bridges via the state’s general revenue, surplus and rainy day funds. The money earmarked for transportation qualifies the state to secure a federal match of $200 million per year.

House lawmakers approved the Republican-led bill on a 75-15 vote, and the Senate followed suit with a 21-10 margin. The legislative support cleared the way for the bill to head to the governor’s desk.

The deal to raise $250 million annually for the next five years was reached during a three-day special session called by the GOP governor that focused largely on a transportation funding solution.

“It’s a unique solution for a unique challenge that we had in this state,” Hutchinson said during a bill signing ceremony. “Everyone met that challenge and came out with a result that did not raise taxes, but resulted in a $1 billion highway program over five years.”

The additional revenue for highways will be accessed from a mix of sources. Specifically, a one-time transfer of $40 million will come from the state’s rainy day fund. In 2018, another $20 million will be transferred from investment earnings collected by the state.

Additionally, a portion of diesel taxes paid by truckers will no longer be used for non-road purposes. As a result, the practice of shifting $4 million each year in fuel tax revenue for general revenues will be nixed.

Also, the state’s highway account will receive 25 percent of the state’s budget surplus each year.

Critics said tapping into the state’s budget surplus would make it difficult to address any other emergencies that may come up down the road. Lawmakers on both sides of the aisle were also critical about the inability to come up with a long-term funding plan.

“I think time will tell how well this works and what additional changes need to be made down the road,” Hutchinson said while addressing criticism of the funding deal.

The governor added that voters should get a say on a long-term funding solution for roads.

“I do believe there is a case to be made for a long-term highway plan. My judgement is this ought to be brought before the voters in 2018.”

To view other legislative activities of interest for Arkansas, click here.

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