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Governor signs bill to raise $95M a year for highways

by Michael R. Wickline | March 12, 2019 at 12:11 p.m.
FILE - Gov. Asa Hutchinson listens Feb. 11, 2019 during a news conference at the state Capitol where he unveiled his highway plan. Legislative leaders were commenting about the proposal that would permanently extend a half-percent sales tax, increase fuel taxes and tap casino revenue.

Gov. Asa Hutchinson on Tuesday signed a bill that would raise $95 million a year more for highways by imposing a wholesale sales tax on gasoline and diesel fuel, increasing electric and hybrid vehicle fees and reallocating other state revenue.

The Republican governor said the measure has broad public support, but added it’s too early to speculate about whether the tax increases will spawn opponents for the lawmakers who voted for the legislation.

The new wholesale sales tax would increase the tax on gas by 3 cents a gallon, to 24.5 cents a gallon, and the tax on diesel by 6 cents a gallon, to 28.5 cents a gallon. The new law indexes the tax and limits future increases to one-tenth of a cent a year, meaning the maximum increase would be 1 percent over 10 years.

[RELATED: Complete Democrat-Gazette coverage of the Arkansas Legislature]

The wholesale tax would raise about $58 million more a year for highways and about $13 million a year more each for cities and counties.

The governor also signed bills Tuesday authorizing a legislative study of the state Department of Transportation with the help of a consultant and requiring the Highway Commission to approve the department’s legislative package.

Read Wednesday's Arkansas Democrat-Gazette for full details.


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