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BRENDA BLAGG: Rough road ahead?

Rest of state highway funding plan made shaky by covid-19 by Brenda Blagg | September 9, 2020 at 1:00 a.m.

This was going to be the year, Arkansas highway proponents thought, when the state would secure another permanent tax to support state and local infrastructure projects.

Then covid-19 happened.

The proposed tax, Issue 1 on the Nov. 3 ballot, isn't a new tax. It is a forever extension of an existing levy.

The hitch is that it won't happen without approval of Arkansas voters in the November general election.

That election comes in a year in which Arkansans have so far buried more than 900 friends and relatives who fell victim to the virus. Many more have suffered from the virus themselves or nursed family members through it as covid-19 visited itself upon almost 66,000 Arkansans.

Even those Arkansans who haven't had such direct contact with the virus have felt its impact in ways they must live and work, if they can still work. Many have lost jobs or seen their businesses threatened in the covid-19 environment.

Employers and employees alike have had to deal with the resulting financial loss. Some struggle to keep businesses open. Others can't pay their bills or put enough food on the table for their families.

Too many Arkansans face financial ruin.

So now the state is asking voters to approve a tax Arkansans will pay forever?

This tax, like any tax, was always going to be a hard sell. The virus makes it nearly impossible.

Even people who have successfully avoided infection or any of the related economic challenges may sympathize with those less fortunate.

That may be reason enough for some voters to reject any forever tax burden right now. Other voters will oppose any tax question out of hand. The details won't matter.

Nonetheless, here they are: Issue 1 is a proposed constitutional amendment to extend a half-cent sales tax that was first approved by voters in 2012 as a temporary tax. The tax was supposed to last 10 years, when bonds for a related highway program will be fully retired.

Extension of the tax is expected to generate close to $206 million a year for state highways and bridges. Another $86 million a year ($43 million for cities and $43 million for counties) would go to local governments for streets and roads.

When proposed in pre-pandemic days, it really did look like an idea whose time had come.

Highway officials were laying the necessary groundwork, explaining where the highway money would go to audiences that really want the road work.

Support had been lined up and money for a campaign was put in the bank. For a long time, there wasn't even organized opposition.

Then covid-19 happened.

There will still be a campaign for the tax extension. A lot of Arkansans still want the road work, if not necessarily the tax to pay for it.

The tax proposal voters will consider on Nov. 3 is part of a $300 million road-funding program pushed by Gov. Asa Hutchinson to address the state's infrastructure needs.

He successfully persuaded state legislators last year to increase fuel taxes and registration fees and to earmark projected tax receipts from casinos to produce a total of $95 million annually in new money for the state Department of Transportation.

The rest of the $300 million would come from taxpayers if Arkansas voters agree to extend that 2012 half-cent sales tax.

The primary source of funding for highways has long been fuel taxes and license fees dedicated to that use. For decades, highway officials have been looking for another permanent revenue stream.

Extension of this sales tax was supposed to be it.

Among the keys to support for the measure is the additional funding that would go to cities and counties.

Ordinarily, sharing road tax receipts naturally recruits support from mayors and county judges and those who make up local governing bodies.

Although they're struggling with budgets, too, their perspective on this particular tax may have been altered by covid-19's impact on their respective constituents.

Gov. Hutchinson recently asked municipal leaders again to support the road-tax amendment. He did so in a Zoom meeting with several hundred people participating in the Arkansas Municipal League's online convention, itself a result of covid-19.

"I hope you'll encourage the folks in your community to vote to approve this vital source of funding," Hutchinson said in a taped message that included reference to the pandemic.

"Nothing has escaped the touch of covid-19," he said, noting that the coronavirus has challenged leaders in cities large and small.

"We continue to tend to the business of life, so when this toxic fog blows into history, we'll still have homes, jobs and an economy," Hutchinson said.

Will Arkansas also have another permanent tax dedicated to highways, streets and roads?

We won't know that answer until the votes are tallied, but don't bet on it.

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


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