Staff and Wire Reports
This story appears in the June 27 print edition of Transport Topics.
Arkansas truckers, whose leadership convinced state legislators to approve a 5-cent-a-gallon diesel tax increase for highway repairs, are seeking a new funding source after a plan to put the tax proposal before the voters ran into stiff opposition.
The state’s diesel tax currently is 22.8 cents a gallon and the tax would not have affected Arkansas’ 21.8-cent gasoline levy.
The newest twist in the state’s highway funding saga came last week when the Arkansas Trucking Association asked Gov. Mike Beebe to take the diesel tax plan off the ballot. Instead, the group asked Beebe to push for preservation of an existing bond program.
The request from Arkansas Trucking Association President Lane Kidd to cancel the referendum followed a poll done by the trade group that found strong voter opposition to the diesel tax, even though most of the public wouldn’t have to pay it.
The group’s polling also found opposition to a ½-cent sales tax increase, but that opposition wasn’t as strong.
Kidd said he had been surprised by the opposition. The measure referring the increase overcame resistance in the Democratic-majority legislature from some lawmakers who had vowed to not pass any tax increases.
“Politically, this is a strange time,” Kidd told The Associated Press on June 20. “While this is the right tax, it is the wrong time. We thought as an industry that proposing a tax increase on ourselves so we could invest dollars on those highways in which we depend, that the voters would allow us to do that.”
Instead of the referendum, Kidd asked Beebe to call a special election to renew a highway bond program for another 10 years and extend a 4-cent diesel tax already in place.
The new tax payments were intended to pay for a $1.2 billion bond program for road projects. As part of that package, legislators also would have put a half-cent sales tax increase for road repairs on the ballot.
After the trucking group made its request to pull the new tax from the ballot, Beebe said he’d meet with state officials before deciding what to do next.
State Rep. Robert Moore (D), a backer of the truckers’ plan, said he was disappointed the new diesel tax might not be put to a vote. Moore said he believed a compelling argument could be made for its passage.
Moore said that not passing the diesel tax increase could complicate efforts to pass the sales tax increase, which was intended to pay for new four-lane highways around the state.
The Move Arkansas Forward Committee, which had been formed to push for the highway package, hopes soon to issue its own recommendation to Beebe on how to proceed, spokesman Craig Douglass said. One option may include backing the renewal of the existing bond program, he said.
The committee’s members include representatives from the state Chamber of Commerce and the Arkansas Municipal League.
“We understand in today’s economic and political environment that taxes are tough,” Douglass said. “I think that probably what we’ll do is have further conversations among the committee and weigh our options and make request to the governor accordingly.”
