Gas, Sales Tax Hikes on Tap

The Arkansas Senate approved a ­measure last week that would allow the governor to put a 5-cent per gallon ­increase in state gasoline taxes on a statewide ­ballot.

The vote would be set for the November 2012 general election.

The ballot would also include a constitutional amendment for a 5% increase in the sales tax rate for 10 years, which would support $1.3 billion of revenue bonds.

Proceeds would finance a network of four-lane divided highways connecting major cities in Arkansas.

The measure has been passed by the House, which must reconsider it this week because a Senate amendment exempted some agricultural users.

The additional revenue would be combined with an existing 4-cent per gallon tax and federal highway grants to support up to $1.1 billion of 12-year grant anticipation revenue bonds.

The Garvee bond deal would be issued by the Arkansas Highway ­Commission.

Voters must approve the 5-cent per gallon increase because the bonds would legally be considered general obligation debt.

Proceeds from the bonds would be dedicated to maintenance and construction on interstate highways in Arkansas.

Lawmakers in 2007 approved a plan for a statewide vote on up to $575 million of Garvee bonds to be issued by the commission.

No date was set for the election.

If voters reject the current legislative proposal, Democratic Gov. Mike Beebe would retain the authority to set another election on the $575 million Garvee bond authorization.

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Tax Transportation industry Arkansas
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