A proposal to put highway funding measures on the Arkansas ballot in 2018 failed to get a majority (51 votes) in the House when a group challenged the proposal’s inclusion of a fuel tax increase.
The house bill, sponsored by Rep. Dan Douglas (R-91st District) proposed allowing voters to approve the state Highway Commission issuing bonds for 20 years and paying those bonds with a 6.5 percent sales tax increase on the wholesale price of gasoline and diesel.
“I’m not coming here today to ask you all to raise the revenue,” Rep. Douglas said before the vote. “I’m coming here today to ask you all to let the citizens of the state of Arkansas decide if this is the way they want to fund their highway system.”
Gov. Asa Hutchinson supported the legislation, but the measures faced opposition from conservative groups who objected to the tax increase. They argued that backing a highway funding plan that is paid for with a tax increase, even if the voters themselves get to approve the proposal, is the same as raising taxes, which many GOP lawmakers promised voters they would not do.
Rep. Andy Mayberry (R-27th District) said, “I believe that when we send this out, it provides a tacit endorsement from this legislative body that we think this is the right thing to do and we think this is the best way to go.”
Americans for Prosperity said the proposal would a hit a state that is overtaxed as it is. David Ray, the group’s Arkansas director, said the state should look at ways to tap into or better manage existing revenue sources, including transferring tax revenue from auto-related sales to highways and/or rebating the sales and use taxes the state Highway and Transportation Department pays for construction materials.
With the proposal’s defeat and few funding options left, Douglas said, “Instead of improving our highway system, we will have to just manage the decline of our highway system.”
