Driving in America—Arkansas Report Part 1

By NMA Member Tom Beckett

This is the first of a series of occasional reports on the activity of the Arkansas legislature regarding highway transportation. I’ll cover not only various legislative acts but also other things of motorist interest that come to my attention here in the Natural State.

To begin, an overview of how the legislature works here. We have two houses that make up the General Assembly, the House of Representatives, which is apportioned by population, and the Senate. There are 100 (75 Republican, 23 Democratic, with two vacancies) House members, who serve two-year terms, and 35 Senators (26 Republican 9 Democratic), who serve four-year terms. Legislators are currently term limited to 16 years lifetime total, covering time in both houses.

The legislature is in regular session in odd numbered years. The session generally begins the second Monday of January and runs 60 days, but a two-thirds vote can extend the session if needed. The 92nd General Assembly started on January 14, 2019, and adjourned on April 24th.

A fiscal session is held in even numbered years, and the 2020 session will be held from April 8 – May 7 and can be extended to May 22 if needed. During the fiscal session, only revenue and other financial related bills may be considered.

The governor can also call a special session anytime if he or she feels there is an issue to be addressed.

Bills in the legislature are passed by simple majority. The governor, currently Republican Asa Hutchison, from Gravette, a town in northwest Arkansas’ Benton County, can veto a bill in total, but also has line item veto power. The legislature can override a veto by a simple majority.

Now that we have the basics covered, on to meatier matters.

One of the more contentious issues in last year’s session was a gasoline tax. The tax had not changed in over 20 years, and the state, falling behind on basic maintenance as well as losing revenue due to more fuel efficient vehicles, was looking to update the tax to realize more cash. The American Society of Civil Engineers rated roads a D+ and bridges a C+. Arkansas has 102,603 miles of Public Roads, with 17 percent in poor condition. Also, there are capital projects that have been pushed off into the future for lack of funding. In 2019, the legislature passed Act 416 which raised the fuel tax by 3 cents, to 24.5 cents/gallon for gasoline, and raised the diesel tax by 6 cents to 28.5 cents.

The more controversial part of Act 416 raised registration fees on electric and hybrid vehicles by $200 and $100, respectively. The thinking is since those vehicles use a lot less gas or none in the case of electric vehicles, there needs to be some way of having them pay their share of highway related costs. As you might imagine, this didn’t sit well with the owners of those vehicles, many of whom bought them in part for the cost savings, which is substantial.

I did some basic number crunching. My 2013 Toyota RAV 4 gets 25 MPG, more or less. At approximately 25,000 miles per year, my fuel tax went from $129/year to $147/year. I have talked to some Prius owners who report getting 45 MPG. Their annual gas tax expense at 25,000 miles was $71.67 and will go to $81.67 with the new tax rate. Add in the extra $100 registration fee, and they are out $181.67 annually–this for a car that gets almost twice my MPG. It’s easy to see the consternation for those folks.

Truckers, on the other hand, were more accepting of the tax increase. As Arkansas Trucking Association President Shannon Newton commented, “The costs of congestion and rerouting are real. The majority of the trucking industry is willing to invest more in infrastructure because it will create a safer workplace, better maintained infrastructure for our equipment, and improve our ability to meet the demands of more customers.”

I realize that most of us don’t want to pay more in taxes. On the other hand, the government services we all enjoy, including public infrastructure, cost money. To some degree, you get what you pay for. The cost of everything has gone up, especially materials. If we want the safe roads we expect to drive on, there needs to be a funding mechanism for that.

In the face of declining revenue, there needs to be an adjustment in fuel taxes. As for the assessments on hybrids and EV’s, it seems like that could have been better set so that the people who own these vehicles are taxed at a more equitable rate compared to gas powered vehicles. The increased registration fees on EVs and hybrids, as currently established, is a disincentive to buy one.

I’m not a raving Greenie, but it does make sense to do things that are beneficial for the environment since we all have to live on this planet, drink the water and breathe the air. The “greener” vehicles point us in that direction. Economic disincentives don’t help that effort.

I have to note that the specter of toll roads did not get much play in the course of road funding discussions, but it inevitably will at some point. I’ll be keeping an eye open for that during this year’s fiscal session. Any time such a plan has been considered in the past, it’s been shot down before going anywhere.

There’s more to this, which I will cover in the next installment, entitled “Wanna Bet?” regarding casinos, ARDOT, and expected gaming tax revenue.

Tom Beckett is a retired driver and fleet manager for JB Hunt, where, in his driving career he ran 770,000 accident free miles, and has driven over two million miles since 1975 in all kinds of vehicles.  A New York native, he is a resident of northwest Arkansas since 2006. He lives in Siloam Springs with his wife Diane and four sleepy cats.

Editor’s Note: The opinions expressed in this article are those of the author.

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One Response to “Driving in America—Arkansas Report Part 1”

  1. David Holzman says:

    Very interesting article, raising important questions. The high cost registrations for EVs and hybrids are not something I would have anticipated. Better they should have had registration fees rise with vehicle weight.

    Thanks, Tom Beckett!