HIghway report: Tax and spend | Arkansas Blog

HIghway report: Tax and spend

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The Blue Ribbon Committee on Highway Finance issued its final report today. The particulars had pretty well been outlined already.

Highway contractors need more tax revenue. The committee proposes to get it by issuing bonds, raising various taxes and poaching some existing sales tax revenue for roads. If you think building highways is more important than education — and there are those who do — you'll want to see some of this passed in 2011. If you're a realist, you'll know this is mostly a wish list for less lean times.

More details:

NEWS RELEASE

The Arkansas Blue Ribbon Committee on Highway Finance has submitted its Final Report to Governor Beebe and others per Act 374 of 2009.

The Final Report contains not only funding recommendations for state highways, county roads, and city streets, but also recommends other legislation that mostly deals with funding issues at the county and city levels. Additionally, the report includes a list of issues that the Committee believes deserve further study.

The Committee’s recommendations were initially due July 1 of this year. However, the Committee filed an Interim Report on that date, citing the need for more time to properly review the vast quantity of information they had compiled before coming forward with recommendations.

“Committee members have worked diligently for the past 18 months on this important issue, and I am very proud of their dedication and commitment,” said Committee Chairman, Senator John Paul Capps of Searcy. “The creation of the Stakeholders Task Force late last year brought even more knowledge and experience to the table. I believe the recommendations contained in this Final Report represent what is best for the State of Arkansas in terms of being able to provide funding for the quality transportation system that our citizens deserve and our economy needs.”

Capps noted that many citizens have probably viewed the Committee’s work as nothing more than a way to raise additional funds for state highways, county roads, and city streets. “Our task was much larger than that,” Capps stated. “The fact is the system we have in place now to derive funds for our public roads is inadequate and flawed. Consequently, the Committee mainly focused on identifying and recommending appropriate sources of revenue and funding mechanisms that should be utilized to correct those flaws. Determining adequate levels for each recommended source may be a moving target, but our goal was to make recommendations for a funding system that will provide flexibility for changing conditions, and sustainability for long-term growth. Our current funding system fails miserably in those areas.”

The funding recommendations contained in the report are as follows:

· A 10-year phased-in transfer of the sales tax that is currently collected on the sale of new and used vehicles, tires, batteries, and vehicle parts and services;

· Indexing the current per-gallon tax on motor fuels to Arkansas’ Highway Construction Cost Index;

· Allowing the citizens to vote on a temporary 10-year, ½-cent general sales tax dedicated to a statewide bond-financed highway improvement program;

· Implementing a new excise tax on the wholesale price of motor fuels;

· Authorizing by public vote on the re-issuance of GARVEE bonds to improve our Interstates using the revenue stream already in place for that purpose; and,

· Modifying funding for the current State Aid County Road Program and creating a new State Aid City Street Program

“Enacting all or any combination of these recommendations will be a positive step forward for Arkansas, and I believe the citizens will benefit greatly through improvements to safety, mobility, and the economy,” Capps concluded.

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