LITTLE ROCK — A loose-knit coalition of groups representing education, child-welfare and health-care interests rallied Wednesday against a bill that they say would siphon millions of dollars in general revenue to state highways with “catastrophic” consequences.
Under House Bill 1418 by state Rep. Jonathon Barnett, R-Siloam Springs, a small percentage of the growth in revenue from the state sales tax would be steered to the Arkansas Highway and Transportation Department.
Supporters of the bill say it would only take the growth from sales taxes on road-user items, such as new and used vehicles. The growth money would be phased in gradually over 10 years once sales tax revenue meets pre-set targets.
About 100 people, mostly from higher-education institutions, crowded into the Old Supreme Court Room on the second floor of the state Capitol to hear state Sen. Joyce Elliot, D-Little Rock, and others stress the “catastrophic” impact they say Barnett’s proposal would have on education and social services.
“We all appreciate the good value of highways,” said Rich Huddleston, executive director for Arkansas Advocates for Children and Families. “But robbing Peter to pay Paul and creating this perfect storm is not the way to do it.
“This is money basically to keep us even,” he said. “We need to find a better way to pay for highways and roads, one that doesn’t undermine other parts of the budget.”
Barnett amended his bill Wednesday morning to make clear it wouldn’t affect the Educational Adequacy Fund and the Educational Excellence Fund, two funds that earmark general revenue to secondary education and higher education, respectively.
In an interview, Barnett said the bill wouldn’t cut any program already receiving general revenue.
“We are not asking for any money they currently have,” he said.
Barnett said he will amend the bill to remove tires, batteries and automotive services from the bill and to delay its implementation two years to 2017. The amendments underscore the former Arkansas Highway Commission member and chairman’s desire to help highway funding in the long term.
The latest fiscal impact statement from the Arkansas Finance and Administration Department shows that the bill, in its current form, would steer $33 million to the Highway and Transportation Department on state sales tax revenue of $2.3 billion in fiscal 2015, $81.6 million in fiscal 2016 and $126 million in 2017. By 2024, that amount would grow to $516.7million, or about 17 percent of the $3.02 billion the state projects in state sales tax revenue that year.
More than $1.4 billion would go to highway maintenance and construction over that 10 years; another $600 million would be evenly split between cities and counties under the traditional way money for road work is divided, with 70 percent to the state and 15 percent each to cities and counties.
Barnett and other proponents wanted the bill now so that the 10 years would lapse about the same time that a $1.8 billion road-construction program voters approved in November will be completed and a half-percent sales tax dedicated to the program expires.
“I’m trying to be fair,” he said. “The important thing is for highways to get into the revenue stream. The flat gas tax doesn’t work anymore.There’s no growth money for highways. Now [gas tax revenue] is starting to go down.”
Craig Douglass, who is coordinating a coalition of business interests backing the bill, said the coalition, called Move Arkansas Forward, has tried to work with bill opponents, but said “it’s hard to work with folks that can’t even entertain any compromise.”
Arkansas, Pages 18 on 03/14/2013