The Governor’s Working Group on Highway Funding continues to look for long-term solutions to meet the immediate needs of the state’s highways. One popular suggestion has been for the state of Arkansas to raise its gas tax, which currently sits at 21-and-a-half cents per gallon for regular gas and 22-and-a-half cents per gallon for diesel fuel. The United States Energy Information Administration states that in the nation currently, the price of a gallon of gas consists of crude oil cost, which makes up 40%, 18% in refining costs, 22% in distribution and marketing, and 20% of federal and state taxes. Craig Douglass is with the Good Roads Foundation. He says an increase in the state gas tax is a short-term fix to a long-term problem.
“The state’s gas tax is actually a consumption tax. It is not a sales tax. It is based on consumption of gas and we are seeing that consumption is declining. The reason is because there are more fuel-efficient vehicles on the road today, as well as vehicles that are running on natural gas and electricity. We have to come up with a permanent solution to provide the funding that we need for roads and bridges.”
The Arkansas State Highway and Transportation Department says that there are over $110 million dollars in immediate needs for highways. As the Working Group looks at how to provide funding for highway needs, the Arkansas Association of Counties is cautioning the group to avoid considering transferring control over certain roads from the state to counties. Executive Director Chris Villines tells member station KUAR in Little Rock counties do not have to ability to raise local property taxes, because they have reached a state limit of 3 mills.
“There is no doubt that revenues are not keeping with the cost to maintain these roads. I think what we have to look at is how are we willing to raise money and how much are we willing to raise to provide the infrastructure that we need.”
Villines says counties don’t have the money available to take over more roads. Craighead County Judge Ed Hill says that would put counties, such as his, in a major financial squeeze.
“A suggestion like that is going to put a major financial burden on us and other counties across the state. We have about 1,300 miles of roads in the county right now that we have to take care of. If we were having to take care of state roads, that means more manpower, which means more money. That should be something that is really thought hard about before it is actually done.”
He says of the 13-hundred miles of county roads, 200 miles of those are hard surface roads, which can take as much as 100,000-dollars per mile to maintain. Craig Douglass says if state roads were transferred to county roads, those roads would be the ones that less traveled. He says of the 16,000 miles of state roads in the state, half of those roads are traveled on by 95% of the population. The other 5% travels on other roads. Douglass says that suggestion is also a very short term fix and really wouldn’t generate any revenue for the highway department. Douglass tells what he says is a more permanent solution.
“The long-term solution is to have a more broad-based funding system which would include transferring the sales tax revenue out of general revenue and bring it to the highway fund. Sales tax of new and used vehicles is a road user revenue that is highway department currently does not have access to for maintenance and construction.”
There are at least one dozen recommendations for increasing highway funding that the Working Group continues to look at as it tries to find a more permanent solution.
