Gov. Asa Hutchinson’s proposal to raise about $50 million in order to qualify for nearly $200 million in federal funds has the support of Arkansas highway officials, but they aren’t ruling out supporting other proposals.
Scott Bennett, Arkansas Highway and Transportation Department executive director, appeared on this week’s edition of Talk Business & Politics and said highway commissioners support what Hutchinson is proposing.
“I will says this: it’s a ‘qualified consensus’,” Bennett said. “There is a consensus to endorse the governor’s plan with a qualification that it is just for the immediate critical needs. We need to continue to work to find a long-term sustainable source of highway revenue.”
Bennett was part of a nearly year-long working group on highway funding that came up with a variety of proposals to consider. Gov. Hutchinson has been adamant that a current highway funding solution not raise taxes. For next week’s expected special session on highways, Hutchinson is expected to propose a plan that will transfer $40 million in rainy day and surplus funds to the Arkansas Highway and Transportation Department. Also, money from sales taxes collected from purchases of new and used vehicles would be transferred to highways to the tune of nearly $10 million. That money will be offset by improved investment returns generated in the state treasury.
But Bennett contends this is only a short-term fix. He said indexing the motor fuel tax so that it rises with inflation automatically is one solution that needs to be considered over the long haul. More fuel efficient cars and electric cars have lowered fuel consumption and consequently taxes from fuel.
“Indexing is one of those issues that would help account for fuel consumption going down and tax revenue going down and to help account for construction cost increases,” said Bennett. “It has some merit.”
He also says that vehicle miles taxed, which was floated in the last regular session, may be a viable alternative to declining fuel consumption but keeping those using the roads paying for them.
“I think a lot of people across the country really believe that ultimately the way to fund highway improvements is a vehicle miles traveled tax, but I think it has a long ways to go,” he said.
Watch Bennett’s full interview below.