LITTLE ROCK — Rep. Robert Moore, the incoming leader of the Arkansas House of Representatives, said he wants the Legislature to come up with more revenue for highways.
But Gov. Mike Beebe and Sen. Paul Bookout, the incoming Senate leader, said they doubt legislators will enact a tax for that.
Moore, D-Arkansas City, said he doesn’t oppose referring to the voters a tax increase for highway upgrades and repair but believes that lawmakers are responsible for taking care of problems without delegating the decision to the people.
“I personally feel that the folks who elected me to come up here elected me to identify the problems, and our transportation system is fundamental ... and then deal with the problem ... and go home, as tough as it is, and tell them why we’re doing what we’re doing,” Moore said. “Whether there are enough of my colleagues who feel that way, I don’t know.”
He told media members at a meeting in Little Rock at the Arkansas Press Association that he wasn’t sure where the new money for highways would come from.
“Most likely that new source of revenue would involve a tax or fee increase somewhere,” Moore said later.
But he said it’s “early in the game” and that he didn’t want to give up on the possibility that there could be a way to “tap into a source of revenue I’m not aware of now.”
If the Legislature won’t approve more money, Moore said, “at a minimum” it needs to refer a tax increase proposal to the voters for them to approve or reject.
This was an idea proposed as a funding option Dec. 1 by the Blue Ribbon Committee on Highway Finance.
But Moore said such an option comes with risks. He said that if the people reject the idea, that would make it more difficult for the Legislature to tackle the issue in the coming years.
“The further we delay repairs we’re not doing now, they are going to be more expensive and the needs are going to escalate,” Moore said.
He said it wouldn’t be pointless to push a tax increase for highways, despite the anti-tax political climate and the incoming legislators elected on no-tax platforms.
“I’m not here to waste my time, I assure you of that,” he said.
The 88th General Assembly starts Monday.
The Arkansas Highway and Transportation Department has said that over the next decade there will be $19 billion of highway needs but only $4 billion to pay for the work.
The $19 billion is broken down in the state’s “highway improvement plan” as $3.4 billion for “capacity needs,” such as building new roads or widening existing ones to handle traffic more safely; $8.8 billion for “system preservation,” which includes improving interstates, resurfacing and shoulder improvements off the interstates, and bridge improvements; $5.2 billion for “congressionally designated high priority corridor development,” which are seven routes designated by Congress for special attention; and $1.7 billion for “economic development connectors,” which are to provide four-lane routes to all cities of more than 5,000 residents.
Bookout, D-Jonesboro, said he’s not sure a tax increase is the “way to go” and is “pretty skeptical” that the Senate would approve a tax increase.
“But we’ve got a long way to go,” said Bookout, who will be Senate president pro tempore. “The crisis situation we have with our highways hasn’t been fully explained to the public yet. I don’t know that that argument has really been made. We’re never going to catch up with a Band-Aid approach. ”
Moore said that if the Legislature does nothing on highways, it would be like “sticking our heads in the sand.”
Bookout said “it’s imperative” for the governor to help educate the public on the problem. Moore also called on the governor to help, saying it would be “critical.”
But Beebe said fixing highways isn’t among his top priorities.
“We’ve got a lot of other things we’re pushing,” Beebe said.
He said that includes changing prison policy to reduce the growth in the number of inmates to save money and to make changes to Medicaid to save money.
“Someone else [Moore] has expressed an interest in taking the lead and I don’t want to hog all the glory,” Beebe said.
The governor said it would be a “pretty steep hill to climb” to pass a tax for highways.
“Obviously, there is a need,” Beebe said. “The only question is whether there is a political environment that would even entertain [a tax increase]. If [legislators] pass a tax increase and it was reasonable, I would sign it. But I don’t think it’s going to happen. I don’t have an answer to it.”
On another tax issue, Bookout and Moore said many tax cut proposals will be discussed during the session.
Beebe said he’ll continue to push his plan for a one-half percentage point cut in the state sales tax on groceries.
Beebe’s tax-cut plan is projected to reduce state revenue in fiscal 2012 by $20.8 million, including special revenue. The general revenue loss would be $15.5 million.
He acknowledged that a one-half percentage point cut may not be significant and that the state could use that money for other things.
“I think people’s lives have been significantly impacted by what we’ve done so far [with the grocery tax], going from 6 [percent] down to 2 [percent],” Beebe said. “Going from 6 to 1.5, you have to look at the aggregate. That would be a significant help to the average family, for their basic necessities of life.”
He said he doubts the state can afford any other cuts. He pointed to financial projections by his administration and repeated his plea forl egislators supporting tax cut proposals to define how they would cut state spending.
“We didn’t make these numbers up,” he said. “If you want to cut taxes, fine. Tell the people what you’re going to cut in services. If you’re going to make a policy decision about money, tell the truth about where you’re going to get it or if you’re not going to get it [say] what you are going to cut.”
Bookout and Moore said they support the grocery tax cut proposal in principle but that other tax cut proposals are worth studying.
Those would include a cut to the sales tax on used cars, they said.
This tax brought in $125 million to the state and $10 million to local governments in fiscal 2009, according to the Department of Finance and Administration. Revenue Commissioner Tim Leathers said that number has likely gone up since 2009, which was the last year the agency calculated that figure.
Bookout suggested a “phase-out plan” on the sales tax on used cars.
“This is something we don’t have ironed out by any stretch of the imagination,” he said. “We do have a responsibility to the people of Arkansas to provide services to them. We have to balance cutting taxes with the responsibilities we have.”
He said legislators “owe it to the public” to consider cutting the tax on used cars.
“I don’t know if we can afford to do it to be honest,” he said.
Moore said the governor is the “front runner” when it comes to putting forth ideas to cut taxes.
But he said the Legislature will also look at ideas for economic incentives for businesses.
“Job growth will be the spirit of everything we do,” he said.
Moore said he wants legislators to come up with specific examples of which kinds of businesses would benefit from possible tax incentive proposals and how the state would make up the money it would lose.
Regarding Internet sales taxes, Moore said he wants to look at making sure all such purchases are taxed and it could raise from $50 million to $100 million.
Bookout said that’s worth considering.
Beebe said he’s under the understanding that the state can’t take any more steps to further tax Internet sales until Congress acts to allow it. He said many vendors already collect the sales tax on Internet purchases to be sent to the states.
Front Section, Pages 1 on 01/06/2011