Wednesday, January 20, 2016
TOP STORY >> More spending for highways
By JOHN HOFHEIMER
Leader senior staff writer
The decades-old highway-funding conundrum could be solved in the short term if a special session of the General Assembly passes the plan Gov. Asa Hutchinson proposed Tuesday afternoon to benefit road programs here.
The governor announced a plan to fund state highways to the tune of about $48 million a year over the next five years without raising taxes, but some fear, at the expense of the needy.
The state Highway and Transportation Department Director Scott Bennett says the department needs at least $46.1 million a year to provide matching funds to unlock about $200 million a year in federal highway funds.
“In addition to a state investment of more than three-quarters of a billion dollars over 10 years, this new program allows us to access billions of dollars in federal highway money—without raising taxes,” the governor said.
MAY AVERT CRISIS
While some aspects of the new highway revenue plan require approval by the General Assembly, and no group is completely happy, Hutchinson, in conjunction with the highway working group he appointed and some legislators, may have solved the highway funding crisis that has threatened the state and its economy without answer for at least a decade.
The governor announced several moves to fund the highways short term.
For 2017, he would transfer $20 million from unobligated surplus and another $20 million from the governor’s rainy day fund.
He would begin the phased transfer of revenue on new and used car sales from the state general fund to the state highway funds with $1.5 million.
Beginning the second year of the plan, $4 million of diesel tax revenue will move from general revenue to highways, accounting for $2.7 million a year.
He would also eliminate the state Central Services Deduction from the temporary half-cent sales tax, adding another $5.4 million to roads.
That’s a total of $46.9 million in new highway funds for 2017.
In subsequent years, through 2021, the plan calls for no further transfer of unobligated surplus or from the governor’s rainy day fund, but revenue on new and used vehicle sales would be phased in until hitting $25 million a year.
In future years, dedicating 25 percent of surplus General Improvement Funds to the Highway Department could average $48 million a year through 2021, with highway funds growing as high as $81 million a year.
Jacksonville Mayor Gary Fletcher said he’d not had time to review the governor’s just-announced plan, but said his concern that the state road revenue split — 70 percent to the state and 15 percent each divided by the counties and the cities—would be changed to the detriment of the cities and counties has been satisfied.
“We have infrastructure needs like everybody else,” the mayor said. “The highways and roads are falling apart faster than we can repair them.”
“We are in support of the governor’s plan on highway funding,” said Chris Vil-lines, executive director of the Association of Arkansas Counties. “Counties will not suffer immediate detrimental adjustments to critical funding for local roadways. However, we want to continue the conversation about county road needs. Counties do have significant needs in road funding, especially when it comes to county bridges.”
ADVOCATES SLIGHTLY RELIEVED
“The proposal is better than we anticipated,” said Rich Huddleston, executive director of Arkansas Advocates for Children and Families. “There’s not as much impact on state revenue,” he added.
But he said important programs such as pre-kindergarten, child welfare, juvenile justice and after-school programs could be hurt.
“We already have unmet needs in all those programs. People are losing sight of the fact we passed big tax cuts in 2013 and 2014 that currently throw off a $242 million general revenue stream. That’s before losing $5.4 million a year from central services to help fund highways,” he explained.
The programs Huddleston is concerned about are funded through central services in the state’s general revenues.
Posted by THE LEADER at 10:14 AM