Arkansas Lawmakers Begin Advancing Gas Tax Plan To Voters

Mar 10, 2017

State Rep. Dan Douglas (R-Bentonville).
Credit Arkansas Times/Brian Chilson

A pair of highway funding bills – which would be referred out to voters in November – is making headway in the Arkansas Legislature. A House committee easily advanced a bond issue proposal on Thursday morning and then a new tax on gasoline. Bill sponsor Dan Douglas, a Republican from Bentonville, said he doesn’t relish the idea of a new tax but it’s needed.

“Do I like doing this? I wish we had a goose that laid golden eggs,” said Douglas, “Cause we could fund all sorts of issues but we don’t have that goose.”

Representative Andy Mayberry, a fellow Republican, opposes the highway funding plan and its proposed 6.5-percent sales tax on gas and diesel at the wholesale level. He said members of his party should acknowledge they’re trying to raise taxes.

“It’s a tax increase. There’s no way to say it otherwise and be correct in saying it. It would raise or impose the state sales tax at the wholesale level on gasoline,” said Mayberry. “Many of us campaigned on a premise of lower taxes and this is a tax increase.”

He said the tax at the wholesale level will trickle down to Arkansas drivers.

“Retailers have virtually no choice but to pass that along to consumers at the pump. That’s what’s going to take place if this passes and is approved by voters,” Mayberry said.

Rep. Douglas suggested roadways are on the few areas where self-styled small government legislators should rally behind as a good use of public funds.

“The fact is government needs to do for citizens what they can’t do for themselves. And one thing is the citizens can’t build highways and it’s up to us to make the hard decisions,” Douglas said.

He noted the plan has been in the works for a while relying in part on a 2015 Good Roads Foundation study. Last summer the pro-highways group began work on refining funding options at Governor Asa Hutchinson’s direction. The governor supports Douglas’s bills.

Douglas told committee members additional funds are needed to pay for upgrades and maintenance of existing county roads and to help access hundreds of millions of dollars in federal matching funds. The plans would raise about $200 million annually for highways.

Conservative groups like Americans for Prosperity and Conduit for Action oppose the bills. AFP Arkansas Director David Ray told lawmakers, “Choosing between good roads and low taxes is a false choice,”

Ray said there is a menu of possible funding solutions including drawing from existing general revenue funds, which Arkansas his historically kept separate from highway funding. The majority of states draw from general revenue for roads.

Rep. Mayberry didn’t immediately identify alternative funding solutions to Douglas’s plan but said he was confident something could be worked out.