By Thomas Beckett, NMA Arkansas Member
Earlier this year, I wrote about Issue 1 that will appear on the Arkansas November 3, 2020, ballot. If passed, the state would make the temporary half-cent sales tax set to expire in 2023 permanent. The tax’s initial purpose was to fund bonds issued for highway improvements, which consisted of several projects to build four-lane highways. The expiration of the tax would coincide with the bonds being retired. It will set up a permanent funding mechanism separate from the general fund, dedicated to highway construction and maintenance if passed.
Credit: Lyn Gateley
As it happens, as I was about to start this post, there were two opinion pieces in the Arkansas Democrat-Gazette. One was by Governor Asa Hutchinson, who was predictably in favor of it. The other was written by Little Rock resident Mike Orndorff, who wrote about why he was against Question 1.
Governor Hutchinson’s appeal was that the half-cent tax would cost the average Arkansan only $8/month, a tax everyone here is already paying. It will not go up as a result of passing Issue 1. He also stated that passing the Amendment and funding roadways will make Arkansas a more attractive place for businesses to locate because it would show Arkansans are serious about taking care of basics. He also pointed out that local governments will receive a portion of the funds to help maintain local roads everyone uses daily. The state share of the proceeds is 70 percent, with 15 percent each going to county and local governments. He also defends the need to make the change with an amendment since the original tax was established initially by amendment. The rest of his piece is devoted to potholes and safety.
The Mike Orndorff piece is devoted to railing against the 30 Crossing project. That program is a rebuilding of I-30 from the I-40 interchange in North Little Rock to the junction with I-530 and 440 south of downtown. A significant portion of the project funding will come from the extended sales tax. The project has been contentious, as it will disrupt traffic through downtown Little Rock for several years as the road is rebuilt and a new bridge over the Arkansas River constructed. I’ll get into that in a later post.
My thoughts are, we need the money. I’ve said this before, “To some extent, you get what you pay for.” One of the things that make some southern states attractive is the low cost of living and low taxes. Unfortunately, along with those attributes comes low service levels and substandard infrastructure.
At the risk of sounding like a pointy-headed northeastern Yankee (I’m a native New Yorker, the worst kind of Yankee), one of the things that was vastly better in New York was the highway network. Lanes were wide with shoulders on just about every mile of state highway. The pavement quality was mostly good, and they kept the roads clear in winter, which admittedly is not as serious a consideration in these balmy climes.
Funding improvements to existing roads and construction of new roadways where warranted can only help the economic climate here, and equally, if not, more importantly, improve safety. Anyone who ever drove a truck over the Boston Mountains on old US-71 (I did, in the rain, at night, with a 53-foot trailer) will attest that I-49, opened in 1998, is a far safer and more efficient route.
Credit: Nick Youngson
The governor missed the point that the extended sales tax will help create, along with tax revenue from the new casinos, a dedicated source of funding for highways. A couple of years ago, Arkansas increased its fuel taxes and put a surcharge on hybrid and electric vehicles. This change was done to offset the lower tax revenues due to fewer gallons of motor fuel being purchased since cars and trucks nowadays get much better fuel mileage than when the fuel tax was implemented. That by itself won’t generate enough cash to maintain the existing road network and build new ones where needed. While the sales tax extension will also be subject to the economy’s vagaries, it should be more stable over time than the fuel tax.
Many have expressed concern over the fact that the extension is being done through an Amendment. I understand their concern. Once something is enshrined in the state constitution, only another Amendment can change it, an onerous process. That said, highway funding needs are likely to go on in perpetuity, so it’s not likely the tax will need to be altered any time soon. Perhaps the concern over the permanent nature of the tax is not as well-founded as initially thought.
Arkansas has the third-highest sales tax in the nation at 9.47 percent. As much as I would like to see the half percent come off the sales tax, and while I have reservations about the tax being made permanent by amendment making it harder to change or repeal, the fact is the funding stability it will provide long term is a benefit.
The concern that a sales tax is regressive is a valid one; on the other hand, everyone at every economic level benefits from good transportation infrastructure. It will give ARDOT money for maintenance and bridgework, allowing them to plan their work with some certainty of funding to do it. It will allow planning for new construction, as well as help ongoing projects, be completed. Thus, I recommend a vote for Issue 1, so we can move forward with the necessary work to make the roads in Arkansas able to efficiently and safely meet its future needs.
Editor’s Note: The opinions expressed in this article are those of the author.