Arkansas Highway Plan Is Passed
The 82-17 vote was in favor of a Senate plan to immediately raise the diesel tax by 2 cents a gallon and to add the rest of the tax hike a year from now.
The diesel tax increase would join with a 3-cent-a-gallon gasoline tax phased in over three years to generate millions of dollars to reconstruct interstates, other major highways and local roads.
The trucking industry, which just last week agreed to a 4-cent increase if it were phased in, said Thursday it opposed any plan that did not phase in the diesel increase at a penny a year.
The House also gave final approval to a $575 million bond issue to speed interstate improvements. The bond issue will be voted on by the people during a special election in the summer. The House vote was 96-1.
Regardless of the bond vote, the fuel tax increases will generate more than $60 million per year for highway improvements.
The legislation culminates almost two years of work by Gov. Mike Huckabee and legislators to produce the first major highway improvement plan since the early 1990s. Huckabee is expected to
ign the measures next week.
Huckabee, who has regularly sided with trucking interests that have contributed considerably to his political campaigns, backed the compromise.
"We are fully supportive of this bill," Huckabee spokesman Rex Nelson said Thursday. "There are always going to be differences with any industry from time to time. We recognize what they do and consider them friends. But we feel the 4-cent increase phased in is reasonable."
The House Revenue and Taxation Committee approved the latest proposal with little comment Thursday and sent it to the full House, where highway plan leaders were confident of victory after months of negotiations.
"Those of us who have been so involved in this, who have worked so hard, have compromised all we can," said Rep. Bobby Glover. "I feel like we have the votes and we're going to go with it."
The bill needed 75 House votes.
"There's not a motorist in Arkansas that's going to get off easy, whether he or she drives a big rig or just a car to work," Huckabee said Wednesday. "I think the people of Arkansas would rather pay to have decent roads than for repairs and the lack of economic development and have lousy roads that they curse every time they get on them."
Rising prices at the pump soured truckers on a compromise.
Gasoline prices have surged nearly 8.5 cents per gallon at the pump over the past two weeks, reflecting a rise in crude oil prices.
Lane Kidd, president of the Arkansas Motor Carriers Association, said the industry is worried about analysts' predictions of a 10-cent-a-gallon diesel fuel increase by midsummer.
An additional 22-percent diesel tax increase within a year doesn't sit well with the industry, Kidd said.
"That has trucking companies very concerned. It's a very big reason why there is very much anxiety," he said.
The group preferred to phase in the diesel tax increase a penny a year, same as a proposed 3-cent a gallon gasoline tax increase.
The House originally proposed such a provision, but the Senate increased the diesel tax to place a heavier burden on big rigs that do the most damage to roads.
Last week, the trucking industry acquiesced to a 4-cent-a-gallon increase but vehemently opposed a Senate plan to impose the entire hike all at once, saying it would be a immediate $20 million tax increase that smaller firms could not pass on to shippers.
The House defeated the all-up-front proposal, forcing the Senate to retreat to this week's compromise.
