Two separate efforts to raise more money for highway maintenance initially failed Monday in the Arkansas House of Representatives, but the chamber had second thoughts just before adjourning in the evening and passed the more modest of the two measures.
Rep. Johnny Rye, R-Trumann, after seeing his bill to earmark revenue from applying the state sales tax to Internet sales fall short by two votes Monday afternoon, offered to amend the bill to cap the money that would go to highways at $140 million.
House Bill 2085, needing a simple majority in the 100-member chamber, then passed with 56 members voting for it, 25 voting against and two voting present. Seventeen members didn't cast a vote.
"We just talked to some folks about it and told them we were going to amend it," Rye said after the vote. "They just fell right in.
"I hope we get this through. This may be the only highway bill we get through this year."
The bill now goes to the state Senate. Rye said he believes it will be assigned to the Senate Revenue and Taxation Committee. In the House, the bill went through the House Public Transportation Committee.
Supporters of more money for highways were resigned to no highway bill after successive votes on HB2085 and a bill that had the backing of Gov. Asa Hutchinson fell short in the House.
State Rep. Dan Douglas, R-Bentonville, saw his bill to raise $200 million annually for road maintenance fall four votes shy of the 67 votes it needed for the House to consider the bill again. The measure, House Bill 1726, had failed on the House floor on March 14, with 38 representatives voting for the bill, 35 against, 20 not voting and seven voting present.
The bill, which had drawn opposition from Americans for Prosperity Arkansas and other conservative groups opposed to raising taxes, would have referred a bond issue to voters in the November 2018 general election. A favorable popular vote would have triggered application of the 6.5 percent state sales tax to the wholesale price of fuel and directed the proceeds to state highways, city streets and county roads.
Monday was the second time Douglas had asked his colleagues to expunge the vote so the chamber could reconsider, having seen the motion fail 61-24 on March 20, with one colleague voting present and 14 not voting. Expunging the vote requires two-thirds majority of the House, or 67 votes.
"This is the last time I will come up on this," Douglas told his colleagues from the well. "I didn't intend to do this, but I was asked to."
He implored House members to give themselves another opportunity to vote on the bill.
"Members, this is a motion to expunge," Douglas said. "This is not a motion to raise taxes. It's a motion to expunge the vote. You can vote to expunge the vote and not vote for the bill when it is presented. Let me be very clear on that."
He warned his colleagues that they cannot return home without addressing the state's long-term highway funding issues brought on by flat revenue from traditional fuel taxes, thanks to more fuel-efficient vehicles, and inflation raising construction costs.
"This is the only bill we have left in the session that will address highway funding issues," Douglas said. "We have a choice: We can vote to expunge this and reconsider the bill, or we can go home and when our constituents ask, 'What did you do to help address our highways?' -- something every citizen uses every day -- we can say, 'Not one thing.'"
Sixty-three House members voted for the motion, 19 voted against it and three voted "present."
Earlier, Rye had sought support from the well for his bill, which he said was an alternative to Douglas' legislation.
It would earmark some revenue from sales taxes on items Arkansans buy over the Internet to the Arkansas Highway and Transportation Department after the first $15 million is set aside for state general revenue, which funds education, human services and prisons.
Amazon, the online retailer, announced last month that it would begin applying the Arkansas sales tax to online purchases made from the state, a move that would raise an estimated $30 million to $35 million a year. A bill to apply the state sales tax to all Internet purchases has languished in committee.
"You all know and have heard the same things I have outside these walls and basically the people are saying they are not for a tax increase and they're saying our roads are torn all to pieces," Rye said. "This is going to give us a chance to fix the roads in Arkansas."
While Rye said the revenue falls short of the state's highway needs, it could go toward the money Arkansas needs to match the extra federal money it is expected to receive from the most recent federal highway bill, a total of $250 million over five years. To receive it, the state would be required to come up with $50 million.
"It's not going to be a whole lot," he said. "It's not going to be 6½ percent on a dollar. But basically what it's going to do is the road fund has $30 million and we need $20 million to compound with federal money to receive $250 million."
The Hutchinson administration opposed the bill in committee, with an Arkansas Department of Finance and Administration representative testifying his agency isn't able to distinguish between sales tax revenue collected from brick-and-mortar retailers and that collected by online retailers.
Douglas, citing both the lack of progress on the Internet sales tax bill and the administration opposition, spoke against the bill.
"We have yet to completely pass a bill ... through to the governor, signed, that says we will collect Internet sales tax," he said. "So we're trying to spend money we haven't even said we're going to collect yet. That's a little bit problematic for me.
"DFA has no way to determine whenever the money comes in that this comes from new Internet sales taxes. You see, the majority of these companies send their taxes in through a third-party collector. ... And they don't really know where the money comes from, and so how do we determine what is an Internet tax and what isn't?"
Even if the state only expected to receive the Amazon sales taxes, it would fall short of what was needed for highways, Douglas said.
"I would love to get whatever money we could for highways, but this is not a solution, I'm sorry," he said.
State Rep. Marcus Richmond, R-Mena, said Rye's bill was better than nothing.
"It appears that when it comes to highway funding, inaction is action, that we do nothing and then we go from here and said we did a lot when in fact we've done nothing," he said. "But I can feel a lot better about it if I can look at the public, my constituents and say: 'You know what, we're trying everything. We're not leaving a single stone unturned. We're looking everywhere.'"
Only at that point will voters be willing to look at increasing taxes, he said.
"And when you finally get to the point with the realization that education controls this, somebody else controls that and somewhere else you can't get money from that, then maybe, just maybe, they won't throw knives, picks and axes at me when I say, 'Hey, it's come down to this, we should give this a try,'" Richmond said.
The House Public Transportation Committee vice chairman also expressed skepticism of the assertions from the Finance and Administration Department that it was unable to segregate taxes from Internet sales.
"We know anytime a state agency says something, it's true no matter what," he said. "They certainly can get up a way to find the money. If I believe that, I would certainly stop paying my state taxes."
State Rep. Jana Della Rosa, R-Rogers, urged her colleagues to vote against the bill, a move that would keep the money in general revenue and not earmark it for highways.
"General revenue, that's the part of the money we control," she said. "There's nothing that prohibits us later on from taking this general revenue and putting it toward highways, so why would we bind our hands now and promise to put the money in a certain place when we don't know what our needs are going to be in the future?"
A Section on 03/28/2017