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BRENDA BLAGG: The road to permanence

Are Arkansans prepared to add “forever” tax? by Brenda Blagg | October 7, 2020 at 1:00 a.m.

The advertising pitch is simple: Vote for roads. Vote for Issue 1.

The issue is not so simple.

And it's under consideration at a time when the lives of Arkansans are sorely complicated by this curse of a pandemic.

Covid-19 continues its spread in the state, claiming lives and sickening breadwinners in home after home. Other Arkansans, not necessarily infected by the virus, have lost work or seen their businesses suffer or fail in a struggling economy.

It is against that difficult backdrop that Issue 1 appears on the Nov. 3 ballot.

Covid-19 wasn't an issue when state lawmakers decided in early 2019 to refer the question in this year's general election.

Legislators thought they had found a permanent means to secure funding to meet long-acknowledged needs in the state's transportation infrastructure.

At the behest of Gov. Asa Hutchinson, lawmakers passed a multi-faceted road improvement program. Referral of this proposed constitutional amendment was its key fund-raising element.

The amendment would make permanent a half-cent sales and use tax the state already imposes. That levy, originally approved by voters in 2012 for a four-lane road program, was supposed to disappear, when bonds issued for those improvements are paid off.

Issue 1, if approved, would make that sales tax a forever tax, beginning in 2023, when the temporary tax is to expire.

As with that older tax and most other substantive funding increases for state highways, revenue from the permanent levy would be shared with the state's cities and counties for their infrastructure needs.

For every dollar the tax produces, 15 cents would go to the collective Arkansas cities and 15 cents to the state's counties to be divided among the different local governments.

That formula translates into a lot of money to the state and local entities year in and year out.

The Arkansas Department of Transportation would receive an estimated $293.7 million each year. Cities would get $44 million and counties $44 million, according to the state Department of Finance and Administration.

All those new dollars in state and local coffers, according to proponents of Issue 1, are expected to support more than 3,600 jobs every year and provide $8.2 billion in economic activity over 10 years.

This is the permanent revenue stream for which highway backers have been searching for years. They contend it isn't a new tax, just an extension of an old one.

It is, more precisely, a proposal to replace a temporary tax with one that can go on forever.

Because Issue 1 is a constitutional amendment, the tax, if approved, would be in place until voters pass a subsequent amendment to change it.

Besides being supported by the governor and a majority of legislators, Issue 1 is strongly backed by the state Chamber of Commerce, the Arkansas Trucking Association and the Poultry Federation.

They're behind the $2 million "Vote for Roads. Vote for Issue 1" campaign that started airing ads in September.

Gov. Hutchinson then quoted results from a poll commissioned by the ballot committee that showed 69 percent of the 800 likely voters sampled were in favor of Issue 1 while 18 percent were against it and 13 percent were undecided.

He and others will fly across the state on Oct. 19, the first day of early voting, to shore up support for Issue 1.

Issue 1 won't go unchallenged. An opposition group, "No Permanent Tax. No on Issue 1," has organized to fight the amendment.

The coalition includes the Arkansas Chapter of Americans for Prosperity, Central Arkansas Sierra Club, Audubon Arkansas, the Arkansas Public Policy Panel and Tea Party groups from Northeast Arkansas and Garland County.

Arkansas does need to invest in its highways and bridges and in local infrastructure, too. But is this the year, of all years, to put a forever tax on Arkansas taxpayers?

Arkansans would benefit from better roads and bridges, whether state or local. Some would benefit from road-building jobs. Related industries could certainly count on new work every year.

But all those benefits would come at the expense of this state's taxpayers, many of whom just don't need another hit right now.


Brenda Blagg is a freelance columnist and longtime journalist in Northwest Arkansas. Email her at [email protected]


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