Legislators looking at tax increases for highways

— House Speaker Robert S. Moore Jr. announced Thursday that a highway improvement plan calls for tax increases in two separate packages.

Moore, D-Arkansas City, said he will propose tax increases to be approved by the Legislature that could include removing some exemptions from the severance tax on natural gas to pay for maintenance of existing highways.

He said another plan by Rep. Jonathan Barnett, R-Siloam Springs, would ask voters to approve a constitutional amendment for a sales-tax increase of one-half percentage point for a bond program for highway construction.

Moore brought up the highway details during a news conference in his office.

“I’m hoping that my colleagues feel the same way Ido, that nobody wants to go home and say, ‘I want to let you know I’m against roads. I’m against highways,’” Moore said. “If we don’t have the courage to find a way to fund them, that’s basically what you’re saying.”

He said good highways, education, and a favorable tax structure for business are three keys to improved economic development in the state.

“This is a problem that has to be fixed. Period,” Moore said. “We’re either going to do it or pass it on down for someone else [in the future] to do it.”

He declined to give details about the tax increase he would propose but said that it would raise a “substantial” amount of money. He said he’s studying whether to include in his bill removal of exemptions to the severance tax on natural gas.

A severance-tax package was approved during a 2008 special session after Gov. Mike Beebe reached agreements with natural-gas producers. The tax includes exemptions from the full rate of the tax of 5 percent on low-performing and startup wells.

More details would be revealed next week, Moore said.

“It’s like a soap opera,” he joked.

Barnett told reporters afterward that he didn’t know the speaker had announced anything.

His House Joint Resolution 1001 as it stands now is in “shell bill” form, meaning details will come in subsequent amendments. It calls for a constitutional amendment to raise revenue for highways but says nothing yet about how that would be done.

Barnett said he’s not sure whether he’ll support Moore’s proposal.

“There’s been a lot of talk and I’m not sure what the latest is,” he said.

As to whether his fellow Republican legislators would support his constitutional amendment plan, he said, “I’m hopeful there will be several. There probably will be some that won’t. It’s not in its final form yet. I don’t know. The speaker and myself, we’re trying to work together.”

He said maps would show the highways to be improved with any new money that would result.

Barnett said his plan would raise about $200 million a year to pay off bonds, and the tax would expire after 10 years.

Beebe’s spokesman, Matt DeCample, said it’s too early for the governor to say whether he would support Moore’s tax proposal but would likely look favorably on Barnett’s.

DeCample said Moore is a “good guy to be leading” the efforts to improve highways. He said Moore hasn’t shared with the governor details about his plan.

“We’ll see the bill when he files it,” DeCample said. “That’s when we’ll talk about what all he’s put into it.”

As for a proposed constitutional amendment, DeCample said, “The governor has said again and again he’s always for letting people vote on something. In this [antitax] legislative climate, that may be the best chance for [approving additional highway revenue].”

Front Section, Pages 7 on 02/18/2011

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