Most of those knowledgeable on the topic would agree that Arkansas has a highway funding problem. Or, at a minimum, it’s an “issue.” Our roads are in need of repair and expansion, but the money necessary to meet these needs isn’t there. Decisions made in the coming months by elected officials, and possibly the voters, will shape the future of our transportation infrastructure for years to come.
In 2016, Gov. Asa Hutchinson called two special sessions of the General Assembly, one of which was primarily designed to address highway funding. Due to a decline in revenue dedicated to highways, the state was facing a shortfall in funds required to obtain federal matching money for highway construction and maintenance. Unless some additional funding was located, Arkansas risked losing hundreds of millions of dollars in federal highway funds.
This is an Opinion
During the special session, the General Assembly passed the Arkansas Highway Improvement Plan of 2016. It directs about $50 million a year from general revenue and surplus dollars to highway funding in order to ensure the receipt of approximately $200 million annually in federal funding.
The problem is, however, that the funding plan adopted in 2016 expires after five years and the General Assembly failed to adopt a longer-term plan in the 2017 regular session. There was an effort, spearheaded by Rep. Dan Douglas, R-Bentonville, to refer a measure allowing voters to decide whether to create additional revenue for highway needs. The Douglas measure, had it been referred to voters and approved, would have increased the fuel tax to create more dollars for highways. However, the legislation failed on the floor of the House.
As with many issues, Arkansas isn’t the only state grappling with this problem. As many as 28 states are considering methods for funding highways, with more than 150 pieces of legislation filed on the matter. There are no easy answers.
So, what’s next here at home? One option, discussed by the Arkansas Highway Commission, is an effort to place a measure on the ballot through the initiative process — that is, draft an initiated act addressing highway funding and obtain the signatures necessary to have it appear on the ballot in November 2018.
Such a process is difficult and expensive. As a result, it is far from certain that this route, if pursued, would succeed. In that regard, at its recent October meeting, the commission seemed less eager to try for an initiated act.
Waiting until 2019 and asking the General Assembly to address the issue, either through legislation or a referral to the voters, seems more likely.
Whatever the method for raising the money, Gov. Hutchinson recently made clear that he will not support moving general revenue to support highways. That money, he believes, must remain dedicated to its current causes to ensure a balanced budget. In short, highway money must come from a new stream of revenue, such as an increase in the gasoline tax, raising other taxes or implementing new ones. If that’s the agreed-upon route, you can expect legislators to refer that issue to the voters rather than vote for it themselves.
At the end of the day, if something isn’t done we won’t have sufficient money for our highways. Given the critical role infrastructure plays in the health of our economy, that simply can’t be allowed. While raising taxes is unpopular, Arkansans have shown that they are willing to do it when it comes to our roads.
Erika Gee is a partner at the Wright Lindsey & Jennings law firm in Little Rock and represents clients in government relations and regulatory and compliance matters. Email her at EGee@WLJ.com.
Justin Allen leads the firm’s government relations practice group and works with state and local governments on matters of policy, regulation and legislation. Email him at JAllen@WLJ.com.