The Governor's Working Group on Highway Funding decided Thursday that its immediate focus should be on finding additional money to meet the the short-term needs of Arkansas roads.
The Arkansas Highway and Transportation Department has put that amount at $110 million, which would cover the cost of the reintroduction of what it calls an overlay program. At about $200,000 per mile, the program provides an inexpensive way to lengthen the life of a road before it needs a total reconstruction, which costs about $1.5 million a mile, according to department officials.
The extra money also would allow the agency to match all the money it anticipates the federal government would make available to Arkansas for road construction, Highway Department Director Scott Bennett said at a working group meeting Thursday at the state Capitol.
Thursday's deliberation also touched on a host of funding issues that have the potential to spark heated discussion, if not an all-out political war. They include whether the traditional sharing of transportation money among the state, cities and counties should continue and whether there should be more accountability for the state money cities and counties receive.
The state receives about 70 cents for every dollar Arkansas raises for road construction, with the remaining 30 cents evenly split between cities and counties.
Some of that 70 percent goes to things other than highway needs, most notably the roughly 3 percent that goes to the Central Revenue Fund, which helps pay for constitutional offices, including lawmaker salaries, and state fiscal agencies. Other revenue the state receives also is subject to that 3 percent charge for the fund.
The amount deducted from road construction funds for the Central Revenue Fund amounted to about $20.8 million in fiscal 2014, which ended June 30, 2014, and included a boost of about $7 million annually from the highway agency's Connecting Arkansas Program. The $1.8 billion program is financed, in part, by a temporary one-half percent increase in the state sales tax.
"I doubt they are doing $28 million worth of work for highways," said Bennett, who is a member of the working group.
Another working-group member, Sen. Bill Sample, R-Hot Springs, said paring the amount of money taken from highway funds should be part of the group's deliberations.
"Since the governor said everything should be on the table, that should be on the table," he said.
Rep. Andy Davis, R-Little Rock, said he wanted to take a closer look at the share of state highway revenue cities and counties receive, which exceeded 30 percent in fiscal 2014.
He expressed support for the two state-aid programs targeting city and county roads because they were administered by the department. Each is funded by a penny of the state's fuel tax, which is 21.5 cents a gallon. Cities and counties each receives about $18.9 million a year from those programs.
But he questioned the transparency of the roughly 30 percent of the balance of fuel taxes cities and counties receive, which totaled about $86.8 million each in fiscal 2014.
"Legislative audit cannot take a look at city and county road funds and say how it's spent," Davis said, adding that state laws that apply to those monies are overly broad. "It's hard to determine how that money is being spent in the aggregate."
But he singled out his home county, Pulaski, as an example. It earmarked $20 million of the money over three years to pay for an additional arch on a new Broadway Bridge, which is under construction now at a cost of about $98 million. State highway officials were unwilling to pay for a second arch.
Part of the county's portion is coming from its share of the half-percent sales-tax increase.
"It draws into question how the dollars we have now are being spent," said Davis, who would prefer the extra money to be spent on more direct road improvements.
Rep. Dan Douglas, R-Bentonville, said he was aware of one county and one city which redirected general revenue they had once reserved for road maintenance and replaced it with their share of the sales-tax increase. That, he said, defeated the purpose of the increase.
"We need parameters on the way that money is being spent," Douglas said. "It needs to go to roads."
Another working-group member, Frank Scott Jr. of the Arkansas Highway Commission from Little Rock, suggested the department receive 80 percent of any new money, with the cities and counties sharing the remaining 20 percent.
But Cleburne County Judge Jerry Holmes, also a group member, said that proposal was a nonstarter.
"From the counties' perspective, it would be hard to get away from the 70-30 split," he said.
Duncan Baird, the working group's chairman, also announced that the group would meet regularly every two weeks to meet the Dec. 15 deadline Gov. Asa Hutchinson gave to deliver what Baird said was a "menu of options" for the governor to consider in raising new money for road construction.
Hutchinson created the working group to head off a potentially bruising fight in the legislative session earlier this year over House Bill 1346, which would have shifted some money the state receives from new car and truck sales and some road-user items gradually from the state general budget to the Highway and Transportation Department.
The shift would have applied only to a portion of money above the amount that came in the previous year and thus, proponents say, would not only have preserved the base general revenue being collected but also allowed general-revenue growth to be available to other agencies and providers.
State general revenue has risen more steeply than highway revenue, which depends primarily on fuel taxes, which have been flat or declining while construction costs continue to rise, thanks to more fuel-efficient vehicles.
Metro on 08/21/2015