LITTLE ROCK, Ark. (AP) - Arkansas' governor is proposing raising an additional $300 million in highway funding a year through a plan that depends on increasing taxes and tapping into expected casino revenue. Asa Hutchinson delivered a high-powered sales pitch for his long-awaited proposal from the state capitol Monday.
“This is a historic highway plan. It's the largest in history,” the second-term Republican governor said. “This plan is balanced and, I think the new revenues are absorb-able and reasonable.”
The $300-million plan includes asking voters next year to extend a half-cent sales tax that was approved in 2012 for highways. It also calls for imposing a new fuel tax that will increase gas prices 3 cents a gallon and diesel 6 cents a gallon. It would also dedicate at least $35 million in tax revenue from casinos that were legalized by voters last year.
The plan represents the minimum the head of the Arkansas Department of Transportation could live with and still stay ahead of crumbling infrastructure in the state.
“The vast majority of the projects will be pavement improvements,” said Scott Bennett, ARDOT director. “It will be taking care of what we have. That's the biggest need that we have with such a large highway system that we have now.”
Politically, Hutchinson hopes the proposal wins over shaky Republican lawmakers who balked at supporting his proposed tax cut on the state’s high earners. That plan lost a vote in the state senate before winning approval the next day. It begins its run through the House in committee Tuesday morning. The highway plan’s use of casino funds also appeases Democratic lawmakers concerned the need to pay for roads and bridges would eat into general revenues used for education and health care.
“That’s the main thing we want to dig into at this point,” said state representative Megan Godfrey (D – Springdale). “If the plan does what [the governor] says it does, than I think we’ll give it a thumbs up.”
Support was easy to find among trade groups who stand to benefit from better highways, even if fuel costs rise as a result of new taxes.
“Friday afternoon I was on the phone with the governor. Later Friday afternoon I was in a tire store in Fayetteville,” said Joe Quinn, the head of the Arkansas Good Roads Foundation telling a personal story of why he thought roads needed fixing right away. “My daughter is a college student in Fayetteville and she had taken out a tire in a pot hole and then I was informed that the rim needed to be replaced also.”
“The costs of running equipment on roads that are not well maintained as well as congestion and going around weight-restricted bridges; all of those things are putting costs, soft costs on the industry,” said Shannon Newton, CEO of the Arkansas Trucking Association.
The governor has said in the past that his high approval ratings mean nothing if he doesn’t spend some of the political capital and goodwill. He says asking for tax hikes for roads is an easy sell, based on what he’s hearing from lawmakers and the public.
“I've never seen the public in a greater mood for a highway plan,” he said. “They’re actually demanding of their legislators ‘don't come home without a highway plan.’”
In terms of getting through the legislature, the skids have been greased, with only need simple majorities required to raise the tax on gas and diesel.
The proposal also calls for new fees for registering hybrid and electric vehicles.