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.
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.