The Blue Ribbon Committee on Highway Finance will hold four meetings across Arkansas in May to get public input on its proposals for financing state and local highway and street projects.
The panel will provide an interim report to the governor and the General Assembly on July 1, and a full report before its term expires at the end of the year. It was established by lawmakers in 2009, and charged with developing a comprehensive revenue system for transportation efforts on state highways, county roads, and city streets.
The revenue transfer subcommittee has proposed a highway trust fund, which would receive revenue from the sales and use taxes on new and used motor vehicles and commercial trailers, as well as taxes on vehicle repairs and parts, and retail tire and battery sales.
That revenue, about $425 million a year, currently flows into the general fund. The subcommittee’s proposal would phase funding for the new trust fund over four years, beginning in July 2011.
Gov. Mike Beebe said he was opposed to shifting revenue from the general fund without replacing it with source.
The subcommittee has proposed a combination of a new excise tax on the wholesale cost of fuels and indexing the tax on motor fuels to increases in highway construction costs.
The panel said a 6% tax on wholesale fuel costs would raise more than $100 million a year if the average wholesale price were $1.93 per gallon. Indexing fuel taxes to construction-cost inflation over the last three years would require an increase in the state fuel tax to 30.1 cents per gallon from the current 21.5 cents per gallon tax set in 2005.
Dan Flowers, director of the Arkansas State Highway and Transportation Department, said at least an additional $200 million a year is needed to maintain the current system of state and local roads.