Arkansas Highway officials say a three month extension of the Federal Highway Trust Fund is not sustainable for future planning of projects. Arkansas has pulled $350 million dollars’ worth of projects due to uncertainty about federal funding. Director of the Arkansas Highway and Transportation Department Scott Bennett says a Highway Funding Study group has been formed by Governor Asa Hutchinson to look at what the state can do to fund future projects:
“70% of our construction program is made of federal dollars. That means as soon as we pay our contractors, we get 70% of that payment back from the federal government. They are entering into a cash management situation where they will not provide full reimbursements back to the states. With the state revenue in a flat declining situation (due to a decrease in motor tax revenue), we are at a point where we can’t carry the federal government any longer.”
Bennett says gas taxes have traditionally been a way to raise revenue for roads and bridges. He says that may not be sustainable either
“Consumption is down, and when that decline happens, that means the revenue is declining. That is because the gas taxes are based on every gallon of fuel that you buy. At the same time, people are driving more in more fuel-efficient vehicles. The talk at the state and federal level is whether the fuel tax is a sustainable way to provide investment for highway improvements, or if there is another source of revenue.”
He says all funding options are on the table at this time, including the possibility of making Interstate 40 between Little Rock and Memphis a toll road.