A group formed to study highway finance in Arkansas should look long term to solve the state's shortfall in road construction spending and avoid a short-term fix that would require a lot of money, given the anti-tax sentiment in the state, Gov. Asa Hutchinson said Thursday.
"We obviously want to address the problem we all know is there, which is that we have a declining revenue stream for our highways," the governor told about 75 people attending the newly renamed Arkansas Good Roads Foundation board and general membership meeting in Little Rock. "We need to address that."
But not all at once.
"I would like to see us really give close examination to a new funding model that starts very modestly," he said. "I think that's going to be the big debate -- there will be many that will say we've got to have an immediate infusion because the needs are so great.
"But you have to deal in political reality, and the reality is you have an anti-tax sentiment in terms of increasing taxes and that you're going to have to work through that."
The foundation was formerly called the Arkansas Good Roads/Transportation Council. The group advocates road construction spending to boost economic development and receives funding from the Arkansas Highway and Transportation Department.
Hutchinson said he would like the Governor's Working Group on Highway Funding, which has its first meeting June 24, to review a range of options that include:
• A tax on each mile a vehicle travels in lieu of fuel taxes. "Some states are looking at it; some states are adopting it and piloting it," Hutchinson said. "Oregon is one of those states. We need to learn how they're doing it, their experiment. To me, it's important, as technology develops, to look at VMT-type models."
• Toll roads. "We've been debating tolls in Arkansas for decades and decades and decades. And I think it has to be on the table again to be considered for new construction. I know there are traditional objections to it. I know it has been studied by the Highway Commission."
• The traditional distribution of the revenue from state taxes on fuel in which the Highway and Transportation Department receives 70 percent of each dollar collected, with cities and counties splitting the remaining 30 percent. "We always have to look at if we have the right allocation, responsibility: Local roads, state highways, federal highways."
• Public-private partnerships and "whether that is a way to enhance highway construction, accelerate that." He pointed to the state Highway Commission's decision Wednesday to consider using a new state law allowing a contractor to borrow some of the money to complete a highway project with the state repaying the contractor over five to seven years after the project is completed in situations when the state doesn't have all the money available.
After the meeting, the governor told reporters he wouldn't anticipate the working group wouldn't limit its deliberations to what he mentioned or what he didn't mention, for instance, raising fuel taxes.
"The whole purpose of the working group is to study multiple different options," Hutchinson said. "I think everything is on the table. [But] I didn't come into government to raise taxes. I came in to manage government well. And I think that's the climate of the Legislature."
The governor at one point in his remarks seemed to both compliment and criticize the Highway Department.
"The Highway Department is an efficient operation," he said. "But it is not as transparent and well-known in terms of its operations and decision-making process as many other aspects of government.
"I think it's important that the public understands and has that level of transparency over the decisions that impact their communities, the economy, their businesses. I just think that is something to keep in mind and work toward in the future."
After the meeting, he downplayed the remarks to reporters.
"It wasn't meant to be critical," the governor said. "It was meant as an observation that ... it's an independent agency, and there's not the same type of public knowledge, observations, study on everything that happens in the independent agency versus the public arena of elected officials."
The Highway Commission, like the Arkansas Game and Fish Commission, is a constitutionally independent agency. The governor appoints the commission members, but the department director, Scott Bennett, doesn't report to the governor like the director of the Arkansas Department of Human Services or those of other executive branch agencies do.
"They've historically had a good story to tell on the efficient operation of the Highway Department," Hutchinson said. "That's an example of where people need to have a better understanding of that: how highway money is spent, how it is allocated.
"And, as governor, I couldn't tell you today how the decisions are made. And if I, as governor, can't tell you how decisions are made and all that goes into it, then I would suspect that the average member of the public could use more information as well."
Metro on 06/12/2015