County Officials Differ On Road Tax

Saturday, November 17, 2012

— Some Benton County officials disagree on how best to use the $1.2 million the county expects to receive as its annual share of the recently approved state sales tax for highways.

At A Glance

What Was Approved

Arkansas voters approved an amendment to the constitution Nov. 6 that will increase the state’s sales tax by 0.5 percent — to 6.5 percent — for 10 years. The bulk of the money, estimated at $2.8 billion, is earmarked for the state’s four-lane highways. Groceries, gasoline and medicine are exempt from the added tax. As part of the proposal, cities and counties will also receive a share of the proceeds. Benton County’s share of the tax has been put at $1,288,884 annually or $12,888,836 over the 10 years of the tax. Rogers is slated to receive $996,835, Bentonville, $628,784, Bella Vista $471,325, Siloam Springs $267,876 and Centerton $169,482. Smaller cities will receive lesser amounts based on population.

Source: Staff Report

Kurt Moore and Dan Douglas, both justices of the peace, had a sharp exchange at a recent budget meeting when Moore suggested the county should examine the subsidy provided from the general fund to the road fund if the ballot issues passed.

Douglas was adamant the entire amount of the sales tax be spent on roads and the subsidy shouldn’t be reduced.

“What I was thinking was that with the extra money we’re going to be spending on the roads, there’s going to be more wear and tear on our vehicles, more fuel usage,” Moore said. “There’s probably going to be a certain amount of vehicle replacement that could be attributed to the extra work. I think that, as with any kind of revenue source, you have to look at it closely.

“As Dan so eloquently put it, people expect this money to be spent on the roads. But, as I said, we also need to look at some of the other funds in their budget and see how they’re going to be impacted. I don’t want the county to be in the position of having to increase the transfer from the general fund because of all that extra work.”

Moore said the issue doesn’t have to be resolved now, but he wanted to make other officials aware of his concerns. Sarah Daniels, comptroller, said with the state’s fiscal year ending in June, the county probably won’t receive any of the sales tax before next fall.

Douglas remains determined the county shouldn’t reduce the amount of road work the sales tax revenue can provide.

“Here’s my concern,” Douglas said. “In the past, we’ve transferred about $3 million a year from the general fund to the Road Department. Already this year it’s been cut, down to $2.4 million, I believe. I just want to be sure that just because the road tax passed we do not cut the transfers to the Road Department and grow some other areas of county government. People expect they’re going to be getting some of these dirt roads and others paved or improved. We’ve got to make sure we do that.”

Scott Stober, county public services administrator, oversees the Road Department and presented an estimate of additional work the county could do to the Finance Committee in October.

Stober estimated the county could pave 600 miles — single chip and seal, double chip and seal and asphalt paving — in 10 years time within its normal budget. The extra money from the sales tax measure would allow the county to do an additional 385 miles of paving — an extra 95 miles of single chip and seal, an additional 195 miles of double chip and seal and 95 more miles of asphalt overlay — during the 10-year life of the tax.

County Judge Bob Clinard said he agrees with Douglas on the use of the sales tax money for roads.

“I tend to agree that the additional money should be used for additional work over and above our normal road work,” Clinard said. “I don’t think it can be used for equipment or capital items other than bridges. It can be used for dirt, sand, gravel, asphalt. Things to improve our roads.”

Tom Allen, justice of the peace and chairman of the Finance Committee, said he understands both sides, but he wants to be cautious about committing to extra road work without considering the other costs involved.

“That makes sense, I agree with that,” Allen said of Moore’s wanting to study related costs. “We definitely have to look at those other costs. We put a half-million dollars into asphalt for road work this year and that’s why we’re now seeing that we’re using more fuel than we had budgeted for. It was short-sighted of us not to consider that when you give money for asphalt to pave roads, we’re going to be using more fuel, using the equipment.

“We do have to maintain our equipment, We have to put fuel into that equipment. I don’t agree with cutting the Road Department because we’ve got this extra money. But it’s like building a new building. You’ve also got to budget for the electricity its going to use, for the water and sewer, the personnel to operate it and for maintenance. You can’t just put all your money into the building.”