Report: Arkansans May Support Extension Of Sales Tax For Roads

Jan 4, 2017

Credit Arkansas Highway & Transportation Dept.

A new report from the Good Roads Foundation  suggests a majority of Arkansas Voters would likely be willing to extend a half cent sales tax earmarked for highways that is currently set to expire in 2023.

The finding was part of the policy organization’s survey of 800 Arkansas voters, testing their views on different models for funding highways in the state. The organization's executive director,Craig Douglass, presented the report at the Arkansas Highway Commission's meeting on Wednesday. He says most of the surveyed Arkansans said they wanted a part in deciding how to increase revenues for highways.

“In other words, they don’t necessarily want the legislature to do it. They want the legislature to refer the question back to them, just as was done with the half cent sales tax in 2012,” Douglass says.

The half-cent sales tax was endorsed by 58 percent of Arkansas voters in the November 2012 election. Revenue from the sales tax goes toward the Arkansas Highway and Transportation Department’s $1.8 billion “Connecting Arkansas Program,” which consists of more than 30 construction projects in the state.

In last year’s keynote address at the Good Roads Foundation summer meeting, Gov. Asa Hutchinson asked the organization to come up with ideas that would help solve the long term highway funding needs of the state.

Since last July, the foundation had organized meetings with more than 20 stakeholder groups. In addition to a 47-question survey, the foundation collected views at five regional focus groups. The survey’s margin of error was +/-3.5 percent.

Some other findings from the survey of 800 likely voters:

-90 percent of respondents agreed that Arkansas are in need of repair.

-62 percent opposed a per-gallon fuel tax increase.

-58.5 percent opposed indexing a fuel tax to the inflation-related cost increases.

-48 percent supported collecting fuel taxes at whole sale level (instead of at the pump).

-62 percent support keeping half cent sales tax permanent after 2023 (when it is set to expire).

Over five years, the state must produce about 50 million dollars annually in order to be eligible for nearly four times that amount in federal highway funds.

“Part of this long-term funding program would address the immediate needs of matching federal funds and then continuing to match federal funds as they become available over the next number of years,” Douglass says.

The 80/20 matching formula (80 percent funding from the federal government, 20 percent funding from the state) was made available after Congress passed the Fixing America’s Surface Transportation Act, or the FAST Act, in late 2015.

In May of last year, the Arkansas legislature passed and Gov. Hutchinson signed into law an initial $50 million appropriation to receive $200 million in federal highway funds for fiscal year 2016.