NWA EDITORIAL: Uneasy rider

What is there to like about Gov. Hutchinson's $300 million highway spending plan?

It proposes turning a temporary tax into a permanent one. What taxpayer can feel good about that?

It relies on revenue from predatory casino gambling to fund an essential service of the state. What, the lottery isn't enough?

It raises taxes on everyone who pumps gas or diesel fuel into their vehicles.

And it taxes hybrid and electric vehicles, which could discourage people from purchasing them.

With all that in mind, yeah, we would have voted for it if we held a seat in the state Legislature.

We don't, but of the 135 people Arkansans have sent to Little Rock to represent them, a solid 110 put their support behind the governor's plan. Nineteen voted against it. The rest? Must have needed a bathroom break.

Without question, Arkansas' highway and road needs demand a continuous level of investment to keep it maintained and to, occasionally, build new facilities. Both parts of that equation are vital to Northwest Arkansas and its ongoing efforts to build its economic strength. It's vital to the businesses and residents of the River Valley. It's crucial for every part of Arkansas.

Introduction of Hutchinson's highway funding plan was sped up to assuage lawmakers unwilling to consider his income tax cuts until they could tell voters what the tax cuts meant for better roads. When Hutchinson stepped to the lectern on Monday to detail a highway funding plan, his announcement seemed to calm the waters and smooth the path forward. Oddly, though, the highway plan gave us more discomfort with the income tax cuts, which are largely easing the burden on the (much) higher-income people in the state.

Perhaps we shouldn't be uncomfortable. It's not as though maintaining the income tax was suddenly going to provide a pool of money that would be used for highways. Hutchinson and others (including us) have long had hesitation about sifting money away from general government operations to shore up highways and roads. Highways have their own dedicated revenue flow through motor fuel taxes, but leaders say it's not enough to meet the state's needs.

The income tax cut's anticipated $97 million reduction in revenue to the state, though, doesn't feel quite right in conjunction with the highway plan. It makes it all feel more like a tax shift, with less money coming from high-end earners in the state and more coming from regular, every-day Arkansans trying to pay their bills.

Lawmakers in this still-rural state appear to get to Little Rock and not give a darn about where the money is coming from, overly confident that a dollar is a dollar, regardless of where the state gets it. But what's a dollar to a Walton or a Stephens or a Tyson, and what's a dollar to their lowest-paid employees?

It matters a great deal, and Hutchinson's tax cut/highway double-barrel places a heavier burden on working Arkansans, all while granting $74 million of $97 million in tax relief to the state's very wealthiest, those making more than $456,000 a year.

We don't have a fundamental problem with tax cuts, but that's still a tough pill.

We're told, though, that the income tax rate has been a hindrance to Arkansas prosperity. Hutchinson and other supporters of the tax cut say having the highest income-tax rate around these parts hurts economic development efforts.

Is that what the holdup has been?

Now that Hutchinson and Republican lawmakers have their income tax cut, we can't wait for the day soon in which they stand next to a corporate CEO or board chairman who is moving a major operation in the state to hire Arkansans and crediting the tax cut as the reason the company had not considered it sooner.

A bearded columnist friend of ours said (in Saturday's edition) that our angst over the odd juxtaposition of tax cuts and highway funding may not matter to most of the state. Voters convincingly elected Hutchinson and have enough history with him to know this was exactly what they were likely to get. We can't dispute the point.

The best part of the highway plan -- other than finally having a plan -- is that it won't be a done deal until Arkansas voters get a chance to cast a vote in November 2020. That's when the largest chunk of its funding -- $205 million a year -- in the form of a permanent half-cent statewide tax increase on all Arkansans (and visitors) will be on the ballot.

CEOs must not object to that form of taxation.

Commentary on 02/17/2019