Posted 3/22/2013 08:10 am
Updated 1 year ago
LITTLE ROCK - A proposal to divert tax revenue from car sales in Arkansas to the state's highways failed before a House panel Thursday after finance officials and education advocates warned the move could threaten state services.
The House Public Transportation Committee voted 10-9 in favor of the bill, one vote shy of a majority needed to advance to the House floor. The lawmaker behind the idea said he was unsure whether he'd try again before the session ends.
"The Highway Department doesn't have a lot of options," said Rep. Jonathan Barnett, R-Siloam Springs. "They have to come to the Legislature to ask for help, and I tried to represent that today and did that to the best of my ability."
Barnett's proposal would have transferred sales tax dollars from new and used vehicle sales to the state highway department and local governments once the state's sales tax collections exceed $2.25 billion. The proposal would have phased in the amount of money transferred. Finance officials estimated it would have taken away $22 million from the general fund in 2015 and $345 million by 2024.
Education and health advocates have lobbied against Barnett's bill, which they have dubbed "highway robbery," and say a variety of services would be hurt by diverting revenue growth to highways.
Rich Huddleston, the executive director of Arkansas Advocates for Children and Families, noted the proposal was being considered as lawmakers negotiate a package of tax cuts that's expected to cost the state about $100 million annually.
"Together they represent a perfect storm that could really hurt the future funding base for things like education, health care and public safety," Huddleston said.
Barnett, a former state highway commissioner, and others have long advocated for diverting sales tax dollars to help the state's roads. They argue that the per-gallon gas tax that primarily pays for Arkansas' roads is an inadequate funding source, with revenues declining as vehicles' gas mileage improves over time.
"This is the one funding mechanism for the future that's going to allow the state of Arkansas to continue to do what's expected in every one of your districts, and that's maintain good highways," Highway Commissioner Robert Moore, a former House speaker, told the panel.
The measure failed on a party line vote, with eight Democrats and the only Green Party lawmaker in the House voting against the measure. Three of those opposed had signed on as co-sponsors of the measure before Thursday's vote.
Gov. Mike Beebe, a Democrat, opposed the measure and talked to lawmakers about his opposition, his office said.
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