Could Arkansas’ diesel tax soon increase?

| 3/1/2011

One of the Arkansas Legislature?s more powerful members has a plan to fund nearly $3 billion in road repairs and construction throughout the state. If approved by voters, truckers would pay more tax at the pump.

House Speaker Robert Moore, D-Arkansas City, is readying a highway plan that relies on boosting the diesel tax by five cents per gallon. The other part of the plan relies on a temporary half-cent sales tax increase.

Voters would get the final say on the tax increases, which would fund bond programs to help address road repairs and construction of a statewide four-lane highway system. Cities and counties would each receive 15 percent of the funds.

The nickel increase in the diesel tax would be tacked on to the four cents of the tax now tied to a $575 million bond program for interstates, which was approved more than a decade ago. The bond program is slated to go before voters for renewal in 2012.

If the existing bond program is combined with the proposed diesel tax hike, about $1 billion would be made available for highway maintenance.

The sales tax increase would sunset after 10 years. It would be used to pay for a $1.8 billion bond program for new highway construction.

Moore?s proposal is based on recommendations of a governor-appointed task force to address a gap in transportation funding, which is estimated at nearly $15 billion during the next decade.

Arkansas Trucking Association President Lane Kidd said the diesel tax increase is palatable for his group because the revenue would be earmarked solely for interstates and some major U.S. highways.

?We have to do this. There is no way we can continue to only pay what we?re paying today and do the job on our highways that we need done,? Kidd told Land Line Now.

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

Land Line Now Staff Reporter Reed Black contributed to this report.

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