Rebuffed by the Legislature in its quest for more money for road construction, the Arkansas Highway Commission is turning its attention to raise the cash through an initiated act.
What form the proposed act that would be targeted for inclusion on the November 2018 general election ballot wasn't clear Wednesday, but Scott Bennett, the director of the Arkansas Highway and Transportation Department, offered a variation on two initiatives from recent years -- one successful and one not.
His proposal would revive the failed legislation from two years ago in which revenue from a portion of the statewide sales tax on new and used vehicles and other road-user items -- the equivalent of 4.5 percent -- would be transferred to road construction in a five-year phase-in period.
The proposal would replace the temporary statewide one-half percent sales tax, which expires in 2023, with a one-fourth percent statewide sales tax in 2014.
To minimize the impact on general revenue, Bennett's proposal would transfer the general revenue the Legislature raised last year for highways in a special session.
By 2024, the initiative would net $342 million annually to the department, or about 70 percent of the money raised. The balance would be divided evenly between cities and counties, which receive 15 percent each under the traditional method of sharing road construction revenue in Arkansas.
The commission members welcomed the idea of the initiated act, but didn't settle on a specific proposal Wednesday.
"The initiated act is the way to go," said Tom Schueck of Little Rock, the commission's vice chairman. "Where we get the money is still up in the air."
But Philip Taldo of Springdale called the proposal a "good start. It's time to start moving in that direction."
Bennett said the effort must begin with the commission.
"We are the ones who will be responsible for carrying this out," he said. "I think we need to be the ones who are the lead on this. You all can't necessarily hire a lobbyist, but I think that whatever plan comes together, it needs to be a plan that comes together in here and not from anybody from outside."
Bennett said he came to that conclusion from the results of the past two legislative sessions, where road construction funding initiatives failed.
"I don't think we've led the charge on everything the last few times, and it hasn't worked out," he said. "I think we need to be a lot more involved on the front end.
Bennett singled out recent remarks from Gov. Asa Hutchinson, who urged people to look outside the Legislature to solve long-term road construction funding issues.
"As to the long-term solutions, it emphasizes that it is difficult to get a referral of this General Assembly out to the voters, and that I hope the leadership of our state and the business community and others will look at an initiated act that might go on the ballot for a highway program," he said. "Otherwise, we'll continue to debate the long-term solution in future sessions."
The Arkansas Good Roads Foundation, which is closely allied with the commission, already is looking into the logistics of putting an initiated act on the ballot, a result of a meeting of the foundation's executive board on Tuesday.
"We're moving ahead on putting together a plan for the process by which an initiated act would be put on the ballot," said Craig Douglass, the organization's executive director. "Not the content. That's up to you all.
"Once the department and commission decide on what that looks like, we talk to cities, counties, chambers of commerce, all of the stakeholders, including funders, including the [road construction] industry and work with the governor's office on it as well."
The logistics include developing a budget for a signature drive, and coming up with the popular name, ballot title and text, as well as working with the attorney general's office and the secretary of state's office and addressing the ethics and legal requirements associated with initiated acts, Douglas said.
But he said the drive would have to begin quickly and likely would involve enlisting volunteers to collect signatures rather than paid canvassers.
"We would come down on the volunteer side if a petition drive could be started fairly soon because the deadline for turning in petitions for an initiated act for the November 2018 ballot is July 6 of '18," Douglass said. "We have roughly 14 months if that were to get started."
An initiated act requires 68,000 signatures of registered voters to be placed on the ballot, he said.
The discussion comes amid continuing road construction funding setbacks and uncertainties.
A legislative measure backed by the Good Roads Foundation that would refer to voters a bond issue to be paid with a 6.5 percent statewide sales tax on the wholesale price of fuel failed in the state House of Representatives.
The House did approve a bill that would have directed revenue from a tax on items purchased online to road construction, but it died in a Senate committee.
Meanwhile, the department continues to struggle with coming up with enough state money -- $50 million annually -- to match the extra federal money available for road construction -- $200 million. The state must pay 20 cents for every federal dollar devoted to road construction.
A patchwork of funds were used to come up with the $50 million for 2017 but the department has delayed $250 million in its federal aid road construction budget for the state fiscal year that begins July 1 until well into 2018, when it will know whether the matching state money will be available.
The department also likely will have to eliminate one or two projects from its Connecting Arkansas Program, which is a $1.8 billion construction program financed in part by the temporary one-half percent statewide sales tax in place for 10 years. Revenue from the tax is falling short of projections.
At Wednesday's meeting, the commission voted 3-2 to devote 85 percent of its federal road construction program money beginning in 2021 to preserving existing roads. The remaining money will be set aside for traffic congestion relief, such as adding lanes.
If local jurisdictions request any capital projects, they would have to provide 50 percent of the project cost, and the money available would have to come out the funds set aside for congestion relief. The department previously encouraged local jurisdictions to contribute to projects, but its policy required no set amount.
It would mark the first time the department didn't set aside any of its federal road construction money for capital projects. Currently, 20 percent of the federal aid road construction money is spent on capital projects.
About $357 million in federal money is available annually for the department to prioritize how it is spent.
Metro on 04/27/2017