The Arkansas Senate has approved a plan to raise fuel taxes and tap into expected casino revenue to increase funding for the state's highways.
The Senate voted 27-8 Thursday for a key part of Gov. Asa Hutchinson's $300 million highway funding plan. Among the eight voting against the plan, anti-tax conservatives.
“Everybody in Arkansas loves to have good roads and I want to have good roads,” said state senator Trent Garner (R – El Dorado). “I think trying to put that through gas tax is a funding model that will eventually have to ask for more money from the people.”
The proposal creates a new wholesale tax on fuel that will raise gas prices by 3 cents a gallon and diesel by 6 cents a gallon. It also dedicates at least $35 million in expected revenue from four casinos that will be created under a constitutional amendment voters approved last year. The bill also includes additional registration fees for hybrid and electric vehicles.
“This bill will always disproportionately fall on the middle class and the lower incomes,” said Ryan Norris, the state director of Americans for Prosperity, Arkansas – a conservative political action committee. “They didn't receive as much of that tax decrease to balance against these gas increases.”
Norris counters the conventional wisdom that there is overwhelming support for the plan. The governor said at his news conference announcing the plan earlier this month that the public was “demanding lawmakers don’t come home without a highway plan.”
“We hear from a lot of folks who are against this,” Norris says. “So if hearsay is the way we're going to go with this then each side has their group they can bring to the table.”
Garner would use general revenues instead of gas and sales taxes to pay for the roads.
“We should treat the same way we do education, higher education, and our security forces,” he said while adding other programs could absorb cuts while more general revenue for roads is phased in. “It's that level of priority.”
Dipping into that money usually galvanizes Democrats, but most in the Senate backed the bill Thursday. According to a party spokesperson, Democratic members of the House are warily eyeing the bill as it moves across the Capitol to that chamber.
“I wish that in this instance that Democrats would help to kind of at least stutter step this,” Norris said.
Hutchinson's highway plan includes a separate proposal asking voters next year to permanently extend a half-cent road sales tax. The committee that puts forward constitutional amendments from the legislature began their work on that proposal Thursday morning.