LITTLE ROCK — Gov. Mike Beebe said Wednesday he’s willing to let voters decide whether to raise taxes to help pay for badly needed improvements to the state highway system.
Beebe said he cannot support many of the proposals of a special panel that is recommending measures from fuel tax increases to tapping the state’s general revenues to help make up what highway officials say will be a $15 billion gap between road needs and anticipated revenue over the next decade.
But the governor said he had no problem with the panel’s proposal for a public vote to decide on a half-cent sales tax to finance a bond issue for highway construction. “I never fault letting the voters have a say,” Beebe said.
After 18 months of work, the Arkansas Blue Ribbon Commission on Highway Finance on Wednesday submitted to the governor and Legislature its final recommendations on how to bridge the gap between $19 billion in road needs and a projected $4 billion in revenue over the next 10 years.
The recommendations include indexing gas and diesel excise taxes, levying a new excise tax on the wholesale price of motor fuels, transferring general revenue funds to pay for highway projects and a 10-year highway bond program funded by a voter-approved half-cent increase in the general sales tax.
The 40-page report also recommendations various legislation that mostly deals with funding issues at the county and city levels, plus it includes a list of issues the panel believes deserve further study.
“It’s a tough time to be raising taxes,” Beebe said. “I’m not overly optimistic that there is a reasonable solution, other than taking something of major substance and letting the people decide.”
Still, the governor said it would be “disappointing” if the report is considered by the Legislature but no action is taken.
“There may be some things that can be done. Certainly, (the report) is providing a road map and an educational opportunity for the public to understand how dire the situation is and where the options are,” Beebe said.
“There are parts where I just don’t agree with where their options are. Moving general revenue is not something I agree with.”
The commission’s proposals and preliminary revenue estimates include:
—Referring to voters a proposed constitutional amendment encompassing a 10-year highway bond program and a one-half cent sales, to end after 10 years, to finance a five-year, $1.7 billion bond issue.
—Transferring proceeds from state sales tax on vehicles and related parts to the Arkansas Highway and Transportation Department. The transfer would be phased in over a 10-year period as long as state revenues reach a certain mark. Ultimately, the transfer would put at least $300 million annually into highway projects.
—Indexing the gas and diesel excise taxes with a three-year trailing average of the Construction Cost Index. This also would be phased in over time and ultimately generate at least $419 million a year when fully implemented.
—Levying a new excise tax on the wholesale price of motor fuels. This also would be phased in and generate about at least $59 million per year.
Posted on 01 December 2010
By Rob Moritz
Arkansas News Bureau
