1 panel, not other, OKs Arkansas highway bill

Sen. Jimmy Hickey, R-Texarkana, asks about a highway-funding bill during a packed Senate transportation
committee meeting at the state Capitol on Thursday. Hickey was one of four voting no, stalling the bill in committee. Standing behind him are members of the Arkansas Highway Commission (from left) Robert Moore, Tom Schueck, Alec Farmer and Frank Scott Jr.
Sen. Jimmy Hickey, R-Texarkana, asks about a highway-funding bill during a packed Senate transportation committee meeting at the state Capitol on Thursday. Hickey was one of four voting no, stalling the bill in committee. Standing behind him are members of the Arkansas Highway Commission (from left) Robert Moore, Tom Schueck, Alec Farmer and Frank Scott Jr.

The Arkansas House Rules Committee advanced Gov. Asa Hutchinson's highway-funding bill on Thursday, but an identical bill stalled in a Senate committee.



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The Senate Transportation, Technology and Legislative Affairs Committee later endorsed legislation that virtually mirrors the first year covered under Hutchinson's bill with the expectation that the Legislature would try to enact a longer-term funding plan during the 2017 regular session.

Earlier in the day, Hutchinson told reporters that "the best alternative for a longer-term plan would be to present [any tax increase for highways] to the voters, and that can't be done until 2018.

"I applaud those who look for long-term plans for funding of our highways, and I would not suggest that my plan is the end-all to all of our highway needs in our state, but it is an intermediate plan that solves the current challenge and will get us through the next five years in meeting our federal match," Hutchinson said. The governor is trying to avoid a tax increase to raise funds to match additional federal funds that will become available in the fall.

Today is the second day of the 90th General Assembly's third special session called by Hutchinson. Both House and Senate begin meeting at 9 a.m. today.

Hutchinson's legislation relies largely on surplus funds and increased investment returns from the state's treasury to increase state highway funding by about $50 million a year over a five-year period to obtain an additional $200 million a year in federal highway funds. The Senate version is Senate Bill 11 by Sen. Bart Hester, R-Cave Springs, and the House version is House Bill 1009 by Rep. Andy Davis, R-Little Rock.

Sen. Jimmy Hickey, R-Texarkana, is the sponsor of the legislation that virtually mirrors the first year of Hutchinson's legislation. Senate Bill 12 would raise $49.9 million in state highway and road funding in fiscal 2017, according to the state Department of Finance and Administration.

"We still got two competing bills," Senate Republican leader Jim Hendren of Sulphur Springs said after Hickey's bill cleared the Senate transportation committee in a 6-2 vote with Sen. Jake Files, R-Fort Smith, and Hendren dissenting.

Hendren said both bills have a chance of clearing the Legislature.

"They are not that different with the exception is [that] under one plan, I don't want to do anything until we come back in January in an effort to try to develop an ongoing funding stream. But they both put $50 million towards trying to ensure that match," Hendren said.

Hutchinson is Hendren's uncle.

When asked about the prospects for his bill, Hickey said, "I don't bet. I just go forward.

"By doing this bill, it does not in any way mean that we can't take up exactly what the governor wants to do with the regular session," he said.

"These highways are a large project and a lot of deferred maintenance and we'll try to come up with something else [in the regular session in 2017]," Hickey said.

House Speaker Jeremy Gillam, R-Judsonia, said, "Almost all of the people that I was talking to in the House really have still never had any conversations with the senators on their plan [referring to Hickey's bill], and so they're all pretty much either undecideds or nos because of the dynamics of where we are at.

"They are all prepared to vote on the governor's plan [today] with Rep. Davis' bill, and they are supportive of that, so that's the bill that the House is behind and ready to move forward on," Gillam said.

Earlier Thursday, Hester said he expects the House to approve Davis' bill today and then he'll ask the Senate to send the House bill to the Senate Revenue and Taxation Committee if it is assigned to the Senate transportation committee.

He said he's confident that he has more than the required 18 votes in the 35-member Senate to re-refer the bill to the eight-member Senate taxation committee, where at least five of the senators said they'll vote for the governor's bill.

"[Some] people were not here this morning and weren't here or weren't in the room at the time that intended to do that," Hester said, referring to the Senate's earlier 15-15 vote to re-refer his Senate Bill 11 from the transportation committee to the taxation committee. The vote fell threes votes short of the 18 required to re-refer the bill.

Then, SB11 failed to clear the transportation committee in a 4-4 vote, where five votes are required for approval.

Along with Hendren and Files, Sens. Bobby Pierce, D-Sheridan, and Greg Standridge, R-Russellville, voted for SB11.

Hickey; Committee Chairman Sen. Bill Sample, R-Hot Springs; Ronald Caldwell, R-Wynne; and Byran King, R-Green Forest, voted against the bill.

After the vote, Sample told Hester, "You have two bites at the apple and I would suggest that you get with some of the committee and try to get it worked out.

"I won't go away from here without a bill," he said.

SB11 would create the Arkansas Highway Transfer Fund. The department could use money with the approval of the governor and the Legislative Council.

The fund would have several sources, including a transfer of $1.5 million in fiscal 2017 and $20 million in fiscal 2018 and following years from investment earnings on the state treasury's funds.

The bill would provide for a one-time transfer of $40 million from the state's rainy-day fund to the Highway Transfer Fund.

Highways and roads would get the $8.4 million of a half-percent sales tax for highways that now goes to state central services, which includes money for constitutional offices, starting in fiscal 2017. They also would get $4 million from diesel taxes starting in fiscal 2018.

Starting in fiscal year 2017, SB11 also would provide that 25 percent of the surplus general revenues at the each of each fiscal year would be transferred to the Highway Trust Fund.

King said it's fiscally irresponsible to suggest Hutchinson's legislation is a long-term plan.

"To me, that's not a plan. That's a gamble," he said.

But Hendren said, "We've already heard that this is going to take care of this program through at least fiscal year 2018 with the current surplus projections."

A day earlier, Richard Wilson, an assistant director of research for the Bureau of Legislative Research, estimated that the state could have a surplus of between $160 million and $185 million in fiscal 2016 based on conservative budgeting and lower-than-expected individual income tax refunds.

"Between now and [fiscal 2018], we are going to have a general session and another fiscal session, so we certainly are going to have an opportunity to respond, if we do see a decline in surplus revenue and if we are not going to be able to fulfill that revenue stream, we will have the opportunity to adjust in plenty of time to continue the programs that we have started," Hendren said.

SB11 also would create a 20-member Highway Commission Review and Advisory Subcommittee of the Legislative Council to review the Highway Commission's proposed rules regarding the criteria for distribution of funds and the spending priority designated for highway and road construction contracts. The subcommittee also would receive progress reports on construction projects costing at least $10 millions.

Sample said he questions whether SB11 complies with Amendment 42 to the Arkansas Constitution.

Amendment 42 states in part: "There is hereby created a State Highway Commission, which shall be vested with all the powers and duties now or hereafter imposed by law for the administration of the State Highway Department, together with all powers necessary or proper to enable the Commission or any of its officers or employees to carry out fully and effectively the regulations and laws relating to the State Highway Department."

Also known as the Mack-Blackwell Amendment, it was enacted in 1952 in response to allegations of corruption and favoritism. It was intended to insulate the Highway Department from political interference.

Information for this article was contributed by Spencer Willems of the Arkansas Democrat-Gazette.

A Section on 05/20/2016

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