LITTLE ROCK — The Arkansas Highway and Transportation Department wasted little time Wednesday in advertising for an outside engineering firm to oversee the $1.8 billion road construction program voters approved Tuesday night.
With 2,329 of 2,386 precincts reporting, the unofficial results were:
For............................ 591,656 Against ................... 424,100
But much else remains to happen before the building of four-lane highways and roads can begin under the constitutional amendment raising the state sales tax by 0.5 percentage point to 6.5 percent for 10 years. The state won’t begin collecting the tax until July 1, and it has, under the amendment, no more than “approximately” 10 years from that date to spend the proceeds before the tax expires.
The department also will need to hire a financial adviser to “craft how and when the bonds will be issued,” said Randy Ort, a department spokesman. “We need to come up with a definitive schedule for the projects.
“Our focus now is we have all these pieces to the puzzle. Now we have to put it all together and make this program happen.”
Still, department officials took time to express happiness at seeing the proposal find strong support among Arkansas voters Tuesday night.
“[The] positive vote is evidence that Arkansans believe in the importance of good roads, and that they are willing to invest in themselves and the future of our state,” the chairman of the Arkansas Highway Commission, R. Madison Murphy of El Dorado, said in a prepared statement Wednesday. “The people of Arkansas were presented with an opportunity and they chose to pursue it. This program does not rely on federal assistance — this is money generated in Arkansas, it stays in Arkansas, and it improves Arkansas roads.”
Scott Bennett, the Highway Department director, said his agency is mindful of the ambitious schedule that the state’s latest constitutional amendment lays out.
“We appreciate the opportunity that we have been given,” he said in a statement. “But with that opportunity comes responsibility, a responsibility that we do not take lightly. We have made commitments, both verbally and in writing, and it is now incumbent on us that we fulfill those commitments.”
Last month, the commission authorized Bennett’s agency to seek an outside engineering firm if voters approved the amendment, formally known as Ballot Issue 1. Agency staff members recommended going outside the department in lieu of hiring more employees.
The department already has a full plate managing its road and bridge projects scheduled under its regular mix of state and federal revenue. And the department is about to upgrade 455 miles of interstates over the next few years, thanks to a $575 million bond renewal program voters approved a year ago.
That program will total $1.2 billion once the bond proceeds are leveraged with federal and state fuel-tax revenue. The work also will be financed in part with an existing 4-centper-gallon increase in the diesel fuel tax, which has been on the books since 1999.
Under the amendment that passed Tuesday, the Highway Department will receive 70 percent of the proceeds from the 0.5 percent tax, under a traditional split of money for state road construction, or about $160 million annually for the 10-year life of the tax. The cities and counties will split the remaining 30 percent, or about $35 million annually.
The amendment also creates a permanent state-aid street fund, similar to the existing state-aid county fund, that cities can tap for street projects. One penny of the existing per-gallon motor fuels tax, worth about $20 million a year, would go to that fund.
Murphy credited the amendment’s success to the work of the Blue Ribbon Committee on Highway Finance, which met over two years to develop options for improving Arkansas roads at the city, county and state level. Murphy served as the commission’s representative on the committee.
“What became Issue [1] was proposed by the Blue Ribbon Committee, adopted and referred by the Legislature, and ultimately approved by the people,” he said. “This has truly been a transparent and public process, and I am extremely pleased with the results.”
Murphy also was co-chairman of Move Arkansas Forward, a ballot-issue committee that raised $1.4 million to support passage of the bond renewal program and the constitutional amendment.
The committee unleashed a $700,000 television campaign in October to promote the amendment. Each advertisement stressed the new construction and the jobs that would come with it, while pointing out that taxes wouldn’t be raised on groceries, medicine or fuel.
Teresa Oelke, Arkansas director of Americans for Prosperity, a conservative advocacy group, said she wasn’t surprised that voters approved the amendment because “that was a one-sided campaign and that campaign was pushed as jobs and roads.”
“In an ideal world, if I had unlimited resources, we would have loved to weigh in on that issue. If we had, we could have defeated that tax increase,” she said, referring to her organization. “But like a good fiscal conservative, we prioritized our spending on issues and focused on issues at the state legislative level where we think the greatest threats to our economic freedom are, on a whole.”
Still, Gov. Mike Beebe saw irony on the election results Tuesday that saw voters approve a tax increase at the same time they were turning the Legislature over to Republicans. Many legislative contests featured outside groups hammering incumbent Democrats for referring the tax proposal to voters. The state Senate will have a Republican majority for the first time since Reconstruction.
Arkansas voters, he said, can set aside their anti-tax sentiment when they know a tax is “going to specifically do something they want,” said Beebe, who supported the amendment but didn’t campaign for it. “Arkansans are notoriously independent in their thought process, and they’ll do what they believe is best for their own community, their children, their people if they know a lot about the issue.”
Information for this article was contributed by Sarah D. Wire and Michael R. Wickline of the Arkansas Democrat-Gazette.
Arkansas, Pages 11 on 11/08/2012