By NMA member, Tom Beckett
Editor’s Note: A couple of months ago, Tom wrote the NMA National Office an email with some information on what is going on in his home state of Arkansas with regards to infrastructure funding. We asked him to write more formally about the situation, and we feel his insight gives an interesting picture of funding complexity. Tom has posted two other reports (Arkansas Report Part 1 and Part 2) already on this issue and plans to send more dispatches in the future. In part 3, Tom looks into Arkansas Ballot Issue 1 that voters will decide in November 2020.
Motorists Vote 2020: Arkansas Ballot Issue 1
If voters decide “Yes” in November on Arkansas Ballot Issue 1, the state would then be required to change its state constitution. Currently, the state already assesses a half-cent sales tax that is currently set to expire in 2023. A “Yes” vote would make it a permanent funding source to help fund capital highway projects and maintenance.
For the first time in 20 years, the state raised its gas tax by three cents to 24.5 cents per gallon (Diesel went up 6 cents to 28.5 cents per gallon) on October 1, 2020. So, why does Arkansas need more funding for infrastructure beyond the gas tax? A half-cent doesn’t sound like much, but it adds up, and if you are scraping by, it adds up even faster.
In March, the state’s leading newspaper, the Arkansas Democrat-Gazette, brought the topic to the forefront in two different editorials. Around this time, the Arkansas Department of Transportation (ARDOT) held an informational meeting on Ballot Issue 1 at the Jones Center in Springdale. The general public heard from the state DOT and local officials about the importance of making the sales tax permanent.
Government officials were using the session to pitch the tax extension. Scott Bennett, ARDOT director, said the department would not be able to make improvements without voters approving the tax, “Our job is going to be managing the decline of the highway system,” he said if the vote fails. Local officials also pushed the plan. Benton County Judge Barry Moehring said, “This is not a tax increase. It’s a tax we’re paying now. It’s a vital tax, and a tax to keep our prosperity growing in Northwest Arkansas.”
Also, at the informational meeting, the public learned of the capital projects that will be funded in part by the tax in the northwest Arkansas region. These include a new access road to XNA (the Northwest Arkansas National Airport), a bypass on US-412 around Springdale (in my opinion, sorely needed), and the completion of the I-49 Bella Vista bypass. The I-49 Bypass would connect existing portions of the road in Bentonville to Jane, Missouri. Motorists would then be able to drive on a continuous expressway from Alma, near Fort Smith, on to Joplin, Missouri. The half-cent sales tax would also be used for a half dozen other capital projects around the state.
The cities of Fayetteville, Springdale, and Rogers would see at least $1.3 million each going forward if the tax extension is approved; Bentonville would receive $800,000. The Springdale city council subsequently passed a resolution in support of the amendment.
In its March 10th editorial, the Arkansas Democrat-Gazette editorial board was neutral on Ballot Issue 1. It cited the numbers and wondered how voters would react to the measure in a hotly contended presidential election year.
The second Democrat-Gazette editorial that appeared on the same day was written by the University of Arkansas Professor Emeritus in Physics, Professor Art Hobson. He stated that he was not so keen on the idea of setting a permanent sales tax, and surely not by constitutional amendment. He also wondered if there was too much focus on personal vehicles and not enough on other forms of transportation. Most of Hobson’s arguments are not new:
- Motorists are heavily subsidized already, and a permanent sales tax would encourage even more motorists and their cars
- Too many cars cause more traffic congestion
- The state needs more public transit, dedicated bus lanes, and regional high-speed rail
- A Sales tax is regressive and makes people who are not drivers pay for roads they do not use (Actually, they do every time they purchase items that were delivered via truck.)
The tone of Hobson’s column is that highway users don’t pay enough of the costs for the roads they use. Even though some of his points have merit, there are also downsides.
More transit and regional rail come with astronomical costs and would not necessarily be the transportation solution for all users. To be honest, dramatic changes at high expense are just not going to fly in an area where the state cannot even fund repairs on roads already in place.
As I said in an earlier post, “You get what you pay for.” While I am dubious about the prospect of a constitutional amendment to make the tax permanent, since such things are difficult to change later, the idea of a guaranteed funding stream is worth going to that length.
There are many worthy projects to be undertaken in Arkansas. A permanent half-cent sales tax would allow long-term planning to become a certainty. Having the ability to plan on certain funding levels will make it possible to speed up those projects and give ARDOT, as well as the counties and cities, a reliable source of money to maintain what they have.
As long as the money goes for its intended purpose, the half-cent sales tax extension should be a winner. Then, maybe, someday, I’ll be able to drive to Shreveport without going through downtown Mena.
Next time: I will tackle how money garnered from the state’s casinos figures in the infrastructure funding picture.