Arkansas governor announces $300M highway funding plan

At a press conference Monday, Arkansas Governor Asa Hutchinson proposes raising an additional $300 million in highway funding. (Photo: KATV)

Arkansas' governor is proposing raising an additional $300 million in highway funding a year through a plan that depends on increasing taxes and tapping into expected casino revenue.

"$300 million we'll be able to have a good portion of our highways in the state repaired and still continue to the progress we're making with major construction in the state," said Scott Bennett, director of the Arkansas Department of Transportation, who said he's pleased with the move.

Republican Gov. Asa Hutchinson on Monday unveiled his highway funding plan after his income tax cut proposal faced resistance from some GOP lawmakers who have vented frustration about inaction on finding new money for roads.

The Governor says his plan, while conservative, is the largest increase in annual revenue being directed to state highways.

"There is a limit to how much we should spend and can spend," said Gov. Hutchinson. "Whenever we set a spending program someone has to pay for it."

Hutchinson's proposal includes asking voters next year to extend a half-cent sales tax that was approved in 2012 for highways. It also calls for imposing a new fuel tax that will increase gas prices 3 cents a gallon and diesel 6 cents a gallon.

It would also dedicate at least $35 million in tax revenue from casinos that were legalized by voters last year. Part of the dedicated casino revenue could come from other general revenues, although Hutchinson said he remains confident the money will be available and has the potential to grow with casino expansion. Democrats and some Republicans seem concerned about the possibility of having to dip into other general revenues.

"I think that piece on making sure that none of our services, particularly education, are touched by general revenue is what we have the most concerns about," said Rep. Megan Godfrey (D-Springdale).

With a serious highway funding plan in place, legislative leaders are confident the governor's top bracket income tax cut plan will be able to move forward in the House.

"Those members on the house end who wanted to see highway program, wanted to see a plan introduced - we now have that," said House Speaker Rep. Matthew Shepherd (R-El Dorado). "And so I'm hopeful that will allow us to move forward with not only the highway plan but also with the tax cuts in the next several days."

The Governor's new plan will also provide $110 million in additional revenues to city and county roads departments to help maintain local streets.

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