The legislature early next week will put the finishing touches on a big highway program—make that a potential highway program—and you can choose to celebrate or mourn. There are reasons for both.
Let it be said that Arkansas could use a modest highway-finance program. More fuel-efficient engines in new vehicle fleets have kept highway revenues from climbing as a result of the natural growth of travel and commercial transportation, so state revenues are not going to keep pace with the deterioration of roads, bridges and streets and the rising cost of road materials. Gov. Mike Huckabee raised gasoline and diesel taxes 10 years ago, but the burst of Interstate road improvements is past. The widely despised federal stimulus money from President Obama, which has funded road-improvement projects all over the state the past 18 months, is about exhausted and there clearly will be no more.
So a modest highway program is in order, but nothing of the magnitude of the plan sailing through the legislature. Sure, the state Highway Commission projects that the state needs $15 billion more in highway funds than it will get from taxpayers the next 10 years, but it has been making pie-in-the-sky estimates for 60 years. It would be nice to spend twice that sum and put a superhighway at the service of every community in the state, but if we allow ourselves to dream of a great modern state, glittering highways and bridges would be only a part of the dream. We would like to see first-class schools and colleges, accessible equally to all, a health-delivery system that meets or exceeds that which is available to people in nearly all other industrial societies. Those cost money, too.
We need not sound so alarmist. None of the plans that the legislature is approving will take effect without a vote of the people. Each will be subject to the voters’ veto at the general election in 2012, and we suspect that they will take some selling. People are supposed to be in an anti-tax mood, which is why the legislature referred the plans to a popular vote rather than the customary way laws are passed in a representative democracy. Legislators are elected to make those decisions.
If voters approve, there will be two tax increases: a half-cent general sales tax and a 5-cents-a-gallon tax on diesel fuel. The trucking industry, which would largely pay the diesel tax, actually supports the tax increase but, in exchange, the legislature is exempting their big rigs from sales and use taxes. The effect of that swap is to take money away from public education and give it to the Highway Department, although you will never hear it described that way.
The sales-tax increase will be in a constitutional amendment, which will be on the 2012 ballot. Voters also will have a chance to vote on a big highway-bond issue. If they approve the bond issue, the diesel-tax increase and the sales-tax exemption for big rigs will take effect. All the new taxes would retire the bonds. A new superhighway would be built in each quadrant of the state, no matter the need.
The sales-tax ought to be especially anathema. It will be the first incursion of the big highway constituency into a source of funding that has always been reserved for the general needs of the state: education, prisons, law enforcement, health care and social services for the disabled, blind, aged and poor.
There were better and fairer ways to do it: a real severance tax on the rapid depletion of the state’s vast natural gas reserves (the drilling companies, after all, are the ones tearing up the roads) or a sales tax on motor fuel to take the place of the inelastic excise tax. Road taxes ought to be paid by those who use them and especially those who abuse them.
But you will have your say next year.
