LITTLE ROCK — Arkansas voters could get the chance to decide whether to authorize two tax increases that would mean a “substantial rejuvenation” of the state’s highways and raise about $2.8 billion over a decade, House Speaker Robert S. Moore Jr. said Thursday.
He plans to recommend a proposed constitutional amendment to create a 10-year, half-percentage-point increase in the state sales tax and a 5-cent diesel tax added to existing bond issues, which would also be referred to voters.
Madison Murphy of El Dorado, a highway commissioner, praised the ideas but said they are not long-term solutions.
No legislation has yet been introduced to implement the ideas, except for a resolution that could be amended into a proposed constitutional amendment embodying the sales-tax plan.
Moore, D-Arkansas City, told reporters that an agreement on the proposal was approved by “stakeholders” including the Truckers Association and the Highway Commission on Thursday afternoon and that legislation will be filed next week.
The Arkansas Highway and Transportation Department has said that over the next decade there will be $19 billion of highway needs but only $4 billion to pay for the work.
Moore said it is important that the state find money to address the problem quickly.
He said that if the measures are approved, it will “buy us about 10 years to look at a problem that is not going away.”
The $19 billion is broken down in the state’s “highway improvement plan” as $3.4 billion for “capacity needs,” such as building new roads or widening existing ones to handle traffic more safely; $8.8 billion for “system preservation,” which includes improving interstates, resurfacing and shoulder improvements off the interstates, and bridge improvements; $5.2 billion for “congressionally designated high priority corridor development,” which are seven routes designated by Congress for special attention; and $1.7 billion for “economic development connectors,” which are to provide four-lane routes to all cities of more than5,000 residents.
Murphy said Moore brought together disparate interests to craft the plan, which he also said will buy the state time.
“This does not address a systemically flawed funding system,” Murphy said.
The state already finances improvements to interstates in Arkansas through bonds currently backed by a 4-cent tax on diesel. Voters would decide whether to raise that to a 9-cent tax.
The increase could raise about $1 billion over 10 years, Moore said.
According to Amendment 20 to the Arkansas Constitution, only the voters can approve bonds pledging the state’s faith and credit.
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The half-percentage-point increase in the sales tax would be dedicated to building a four lane highway grid connecting the state, Moore said.
The increase could raise $1.8 billion over the next 10 years, Moore said. Then the tax would expire.
The half-percent sales-tax proposal would also include a program to repair city streets, which Moore said would be funded through a 1-cent portion of the existing motor-fuel tax collected per gallon.
Moore said the funding plan is going to voters because he couldn’t find a plan that a majority of lawmakers would approve. “I recognized this was going to be an extremely difficult battle,” he said. “You work to get a consensus on what you can get done.”
Rep. Kathy Webb, D-Little Rock, called Moore’s proposal a good idea. Moore “isn’t afraid to talk about an issue that’s tough and that some want to put off until later,” said Webb, a co-chairman of the Joint Budget Committee.
House Republican leader John Burris of Harrison said Moore’s proposal is “a good start for a proposal.”
Burris said he wants to read the proposal, talk to the interested parties, including Moore, and then formulate his position.
Though Burris signed the Americans for Tax Reform pledge to “oppose and vote against any and all efforts to increase taxes,” he said, “Voting for a tax and allowing people to vote on whether they want to tax themselves are two different issues.”
Gov. Mike Beebe said he thinks referring the tax increases to voters may have merit and it “sounds like” something he could support. “I learned a long time ago, let’s read it before we make a final thing, but it’s encouraging,” Beebe said.
Beebe said before this year’s legislative session began that he did not think Moore would be able to convince lawmakers to approve a tax increase to pay for road projects.
“I’m not sure my prediction is inconsistent with what he’s doing,” Beebe said.
Information for this article was contributed by Michael R. Wickline of the Arkansas Democrat-Gazette.
Front Section, Pages 6 on 02/25/2011