Brenda Blagg: Getting detoured

No-tax-increase philosophy may hamper highway efforts

Posted: October 25, 2017 at 1 a.m.

There is a reason Arkansas Gov. Asa Hutchinson said "no" to a raid on the state's general revenue to fix state highways.

It is a bad idea.

Hutchinson nixed it last week, saying he would "vigorously oppose" any effort to use Arkansas general revenue for road construction.

His reason? General revenue funds public schools and higher education, public safety, prisons, human services and other basic needs.

"I say, no, we cannot divert that general revenue stream that's needed for education, higher education and other needs over highways," Hutchinson said.

The governor directed his comments to state legislators and to the state Highway Commission and the Department of Transportation and anyone else pondering such a shift.

Hutchinson is not the first Arkansas governor to take such a hard line on the issue, although he gave in last year to permit the use of some general revenue so Arkansas could match available federal funding for highways. Without that match, Arkansas would not have gotten the federal funding it was eligible to receive.

"I think it was the right thing to do then," he said. But he's unwilling to make a greater, phased-in shift like the Arkansas Highway Commission has pondered.

The governor sees two problems. One is the potentially dramatic impact on current state services. The other is the effect on a different Hutchinson goal -- using growth revenue to reduce income tax rates in Arkansas.

Highway backers argue that redirecting some of the money won't "hurt general revenues that much because we'll grow our economy and it will be gradual," Hutchinson said.

"Well, we want to use that growth revenue as an opportunity to reduce the tax rate or do other things in state government."

Siphoning general revenue to build highways, he suggests, would eliminate those options.

The more worrisome element, still, is the possible impact on funding for other basic state needs.

That's what worried former Gov. Mike Beebe when he repeatedly bulled up against a raid on general revenue for highways. And it is the bedrock argument against the idea for Gov. Hutchinson, too.

There is no denying that the state does need more money for highways. That need is real.

Existing revenue falls hundreds of millions short of needs identified by the state Department of Transportation for Arkansas' expansive highway system.

Until last week, the state Highway Commission was poised to consider pushing a ballot initiative in 2018 to get voters to provide roughly $200 million more each year. (And that's just under half the perceived $419 million annual need.)

It is important to remember that the state Legislature last year resisted the commission's appeals to refer a ballot question. That reality had triggered the idea of an initiative.

Now, the commission knows an initiative would face direct opposition from the governor, if the plan includes transfer of general revenue (largely the sales tax receipts on new and used vehicles and tires).

The commission cannot concern itself with just the governor's opposition, however formidable that might be.

There would be opposition, too, from all those impacted by a potential loss of general revenue to public schools, colleges and universities, human services and all the rest of state government.

Highway commissioners cannot -- and should not -- stop exploring ways to get more money for highways. They should find a way other than tapping into the state's general revenue.

The reality for the foreseeable future in Arkansas is that the state government is in the hands of conservative Republicans, most of whom have campaigned against tax increases.

Yet the greater potential for increased highway funds, if they are not to come at the expense of other state services, is from dedicated fuel tax increases and license fee hikes or both.

Maybe the commission and other highway backers can make that case to Arkansas voters.

Of course, it will be difficult.

These are the same voters who have been electing no-tax legislators for the last several election cycles.

Nevertheless, shown exactly how the new money would be spent, voters might be willing to pay more for highways -- assuming Arkansans really want better roads.

Commentary on 10/25/2017