Transportation funds sought in Arkansas

| 2/11/2005

Arkansas Gov. Mike Huckabee’s $1 billion road-building program may be funded by a new 1.5 percent sales tax on vehicles and transportation-related items.

Huckabee promised municipal government officials last month that he and the Legislature would not take money out of the local share of the 1999 state highway bonds to fund the statewide road program.

“I don’t know what kind of highway program we’re going to have … but I can tell you that we started (the legislative process) with the clear understanding that we aren’t touching that turnback formula,” Huckabee told members of the Arkansas Municipal League.

The turnback formula refers to the 15 percent of yearly proceeds from $970 million in state highway bonds that are earmarked for fixing and maintaining roads. Another 15 percent goes to counties and 70 percent is dedicated to state highways.

As an alternative, Huckabee is pushing a plan that would ask voters to approve a $134 million tax increase by referendum, The Associated Press reported. It could be on a statewide ballot as early as this summer.

The Arkansas Highway Commission is cold to the prospects of hiking fuel taxes to pay for a bond issue for the governor’s roadwork initiative.

If approved, it would break with the state’s pay-as-you-go highway user fees.

Highway Commissioner Prissy Hickerson told The AP Feb. 8 that the time doesn’t seem right for increasing fuel taxes now.

Elsewhere, the director of the Ozark Regional Transit, Phil Pumphrey, wants his board to form a regional transportation authority that would collect a local fuel tax to fund public transit and roadwork.

Pumphrey plans to lobby state legislators to pass a bill enabling regions to form their own transportation authorities and levy taxes. The Arkansas Highway and Transportation Department has drafted the bill and is looking for a state lawmaker to do the legwork, the Arkansas Democrat Gazette reported.

If the bill passes, communities could use an interlocal agreement to form a Northwest Arkansas transportation authority. Voters would have to approve a fuel tax separately.

The regional authority would control revenue generated by the tax and be able to direct it to road projects or to run other forms of transit.

Pumphrey has not proposed a figure for the fuel tax to support the transportation authority. Drivers in the state now pay 21.5 cents per gallon for gasoline and 22.5 cents per gallon for diesel.

The proposal would also override state law prohibiting cities, counties or municipal corporations from levying taxes on fuel.

A draft copy of the bill includes a clause that 70 percent of the revenue generated from the tax must go to state highway improvements. Pumphrey told the Democrat Gazette he is hoping his board members can lobby the Highway Department to remove that clause.