The popular titles of two bond-related Arkansas constitutional amendments to be decided at November’s general election were approved last week by Attorney General Dustin McDaniel.
The measure for a 10-year, 0.5% increase in the state sales tax to support $1.3 billion of state road construction bonds will be known as “An Amendment to Provide Additional Funding for State Highways, County Roads, City Streets, Bridges and Other Surface Transportation.”
The tax would go into effect July 1, 2013.
The state expects to receive $160 million a year with its 70% of the additional revenue generated by the tax hike. The revenue will support bonds to build a network of four-lane highways between major cities in Arkansas.
Cities and counties will share $67 million a year as their 30% share of the additional revenues, with each county’s share to be determined by a formula that will consider population, land area and vehicle registrations.
The second measure would allow cities and counties to establish development districts and finance necessary infrastructure projects with bonds supported by local sales taxes.
It will be on the ballot as “An Amendment Concerning Municipal and County Financing of Sales Tax Anticipated Revenue Bond Projects, Unfunded Liabilities of Closed Local Police and Fire Pension Plans, and Real and Tangible Personal Property.”
Sen. Jake Files, R-Fort Smith, who sponsored the resolution that authorized the amendment, said the bonds would provide local governments with a tool to attract economic developments that generate sales tax revenue.
Economic development bonds supported by the local sales tax would be reviewed by the state before being issued.
The measures were placed on the ballot by the 2012 General Assembly.