By Steve Brawner
© 2015 by Steve Brawner Communications, Inc.
Considering a gallon of gasoline is now $2 less than it was not long ago, is now the time to raise gas taxes a dime? Some say yes, if the state is committed to maintaining its highways. Others say no, including legislators and, in a recent poll, a clear majority of Arkansans.
Here’s the problem. Highways traditionally have been funded by the people who use them – drivers of passenger and commercial vehicles through gas and diesel taxes. However, those taxes have remained the same for a long time – effectively cut, actually, because they were not indexed to inflation. The federal gasoline tax of 18.4 cents per gallon has been the same since 1993 even though it costs more to maintain highways. The state gasoline tax of 21.5 cents per gallon hasn’t changed since 2001.
Inflation isn’t the only issue facing the Arkansas Highway and Transportation Department. Since 1993, vehicles have become more fuel efficient, which means drivers pay less in fuel taxes to drive on roads that are becoming more expensive to maintain. Because continuing to increase fuel efficiency is a national goal, the entire transportation infrastructure is funded by a revenue source that is destined to decline.
Even members of Congress agree this is a problem, though they can’t agree on a solution. The federal Highway Trust Fund, which funds 70 percent of Arkansas highway construction, is being kept on life support by yet another one of those half-baked measures passed this summer at the last minute that merely postpones a difficult decision. Faced with a similar situation last year, Congress paid for one year of spending by borrowing from the next 10 years’ worth of revenues. That year is over, and now Congress is trying to find a longer term solution on a short deadline. Its recent track record doesn’t inspire confidence.
In Arkansas, a bill this year by Rep. Dan Douglas, R-Bentonville, would have dedicated to highways the taxes collected from sales of new and used cars. Those taxes currently go into a big pot that pays for a lot of other things. The bill passed a House committee but then went nowhere. Gov. Asa Hutchinson was opposed, as were a lot of other interests funded by that big pot.
Hutchinson did, however, appoint a task force that has been trying to craft a solution. One idea by the Arkansas Good Roads Foundation, a business group, would increase fuel taxes by 10 cents per gallon and then gradually shift new and used car sales taxes to highways, with the fuel tax lowered back to current levels as that shift occurs.
Some legislators, including Douglas, say a fuel tax hike isn’t going to happen. Legislators won’t support anything that looks or even smells like a tax – not even a dime, and not even when fuel prices are low.
They’ve been hearing from their constituents, who voted for a half-cent sales tax for roads three years ago and don’t want to pay more taxes. A recent poll by the Arkansas chapter of Americans for Prosperity, an anti-tax group, found that two-thirds of Arkansans said fixing the state’s highways is a crisis (16 percent) or a major problem (50 percent). But almost that same percentage oppose raising the gas tax. In fact, 45 percent strongly oppose it. Half said a legislator’s support of a gas tax increase would make them less likely to vote for them.
In other words, they’re saying, “Fix the roads, but take the money from state government’s big pot – or at least, some other pot besides mine.”
There are other partial solutions. Only about two-thirds of state highway taxes go to state highways; most of the rest goes to city and county roads and some unnecessarily to state government administration. That formula certainly could be tweaked. Moreover, the state maintains a lot of highway miles that are really local arteries, such as busy Cantrell Road in Little Rock. There’s talk of letting cities and counties assume some of those responsibilities. Guess who’s opposed to that?
There’s one other argument: Some say enough money is devoted to highways, but it’s going to the wrong places. Some legislators say the money should better follow the cars.
That solution may not be affordable, either. Maybe the Highway Department should focus on maintaining what it has and let the cars follow the roads that are already laid. Those roads might be crowded, but at least they would stay paved, and paid for.