Between the lines: Fueling the long haul

Panels give governor feedback on highway funding

Here comes a familiar and not-so-welcome pitch.

The issue is highway funding, which has been a matter more for discussion than action in recent years.

Every so often, someone restarts the conversation, citing the changes in vehicle efficiency and the resulting impact on revenue driven by fuel taxes.

More efficient vehicles require fewer gallons of fuel and per-gallon taxes produce less money to keep up the state's highway system.

Last week, another group of advisers said it intends to deliver a list of highway funding options to Gov. Asa Hutchinson, hoping he will find something there that he can sell to the state Legislature.

The governor created the group in April, asking 20 people to address the nagging issue.

The Governor's Working Group on Highway Funding, headed by Duncan Baird, the administration's budget administrator, also includes highway officials, business representatives, legislators and others.

The governor had rejected a plan offered up during the last regular legislative session that he said would have threatened his balanced budget. That plan was to convert some general fund money to highways, an idea that hasn't gotten a great deal of support in recent years.

But Hutchinson promised this follow-up study and the working group will include that idea of converting general fund dollars to highway use on what is being described as a "menu" of highway revenue options. They're also suggesting fuel-tax hikes and other revenue measures, something like 20 of them.

The goal, as established by the working group, is relatively modest. They're looking to raise $160 million in new money, which would net $110 million for the state Highway and Transportation Department over a three-year period.

The other $50 million would go to cities and counties in the state under a long-standing split that gives each group of local governments 15 percent of new revenue. Providing that money to cities and counties has traditionally been viewed as necessary to win their support and lobbying assistance with lawmakers.

There has been some talk of changing or doing away with that split; but that's not likely to happen.

Let's get back to the bigger picture. This $110 million the group proposes to raise for state highways is a tiny part of what the Highway Department says it really needs.

Department officials say projected needs are greater than $20 billion over the next decade but only $3.6 billion is expected to come from existing state and federal sources.

Some variation of these numbers has been put out each year for the past decade or so as Arkansas officials have examined and re-examined the options for addressing that imbalance.

But, as one of the working group members put it, the options are limited.

"There are only a couple of pathways to get you to additional revenue for highways: reallocating some existing revenue or raising new revenue through taxes and fees," said Craig Douglass, executive director of the Arkansas Good Roads Foundation.

This menu of specific options the working group will give the governor is intended to let him fit something into his overall state budget strategy.

Draft recommendations were released last week and a final plan is expected next month.

It isn't clear how committed Hutchinson is to pursuing additional highway funding right now, although he'll certainly take a hard look at the recommendations.

Some of the ideas, like one to increase registration feeds for hybrid, electric and other alternate-fuel vehicles, might be relatively easy to sell.

Others won't be.

Remember, this is a Republican-controlled Legislature made up of many members who got there on no-tax pledges.

Increased motor fuel and diesel taxes, which are on the menu, might not fly with those people.

Some might be willing to redirect existing revenue to highways; but those parts of state government that get the money now, like higher education and health care, won't readily give it up.

It was just such head-banging that stalled consideration of highway funding in the last legislative session. And there's every reason to expect more of the same.

Commentary on 10/28/2015

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