DRIVETIME MAHATMA: ‘Federal money’ left a bad taste

— Dear Mahatma: My gripe with your column about construction on U.S. 67/167 in Pulaski County is “federal money.” All is from us, the taxpayers. We give the feds a dollar, and they generously give us back about 30 cents.

- Mountain Home.

Dear Mountain Home: You have provided much food for thought. On to the next reader.

Dear Mahatma: Your statement that “80 percent is federal money” raised my eyebrows! Don’t Arkansas taxpayers also pay federal taxes from which this 80 percent is derived? The idea that “federal money” is somehow free money is all too pervasive in our society. - Russellville.

Dear Russellville: You and Mountain Home have taken The Mahatma to the woodshed. He got to thinking and discovered a June 2010 report from the U.S. Government Accountability Office.

The report is about the Highway Trust Fund. The subtitle: “Nearly All States Received More Funding Than They Contributed in Highway Taxes since 2005.”

How can this be?

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It’s because, the GAO found: “Since fiscal 2008, Congress has transferred nearly $30 billion of general revenues to address shortfalls in the highway program when more funding was authorized than collected.”

This being the government, no fewer than four ways were presented to show how each state fared. Let’s stick with the first, and perhaps easiest to understand. The GAO describes it as states’ return per dollar contributed to the Highway Trust Fund, fiscal years 2005-08.

Low state on the totem pole was Texas, which got back from the trust fund a buck for every buck it contributed. Every other state or district got more back than it contributed.

Arkansas? It took in $1.25 for every dollar it contributed to the trust fund, the GAO reported.

Highest? Washington, D.C., $5.63 back for every buck put in. Cynics might say this is because congressmen hate potholes. (We are not a cynic.)

From where does the federal Highway Trust Fund get its money? From taxes on gasoline, diesel fuel, gasohol, truck tires, truck sales and heavy equipment use. Gasoline and gasohol are taxed at 18.4 cents per gallon; diesel at 24.4 cents. Truck sales are taxed at 12 percent of the retailer’s sales price for tractors and trucks over 33,000 pounds gross vehicle weight. For heavy vehicle use, there is a maximum federal tax of $550 per year.

Had enough? Sorry.

On Wednesday, the Arkansas Blue Ribbon Committee on Highway Finance will present to the governor and Legislature a plan for raising more money for highways.

Our reporter, Noel Oman, secured some information in advance and reported some of the proposals.

One that is sure to pique the interest of taxpayers is a new half-percent general sales tax to last 10 years.

Look for this, my friends, on the 2012 ballot.

Ain’t democracy grand?

Mahatma@arkansasonline.com

Arkansas, Pages 11 on 11/27/2010

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