The Arkansas Blue Ribbon Committee on Highway Finance said last week it would issue its first series of recommendations on how to finance city, county, and local roadwork in early 2010. Members said they will offer several options for consideration by the public.

The 18-member committee must issue a report to the General Assembly by July 1 on an adequate system for financing roadwork. The panel was established by the 2009 legislature.

Dan Flowers, the director of the Highway and Transportation Department, said his agency requires an additional $200 million to maintain the existing 16,000 miles of state highways at an acceptable level.

Another $19 billion will be needed over the next 10 years to expand and improve the road network, according to the department.

Flowers told the committee that current state fuel taxes are not sufficient to meet the highway system’s needs.

A tax of 21.5 cents a gallon for gasoline and 22.5 cents a gallon for diesel generates approximately $430 million annually for road efforts.

The highway department has an annual budget of $1 billion in state and federal funds.

Two subcommittees have been working on funding solutions since August. Various options are being considered by the new revenues subcommittee.

The possibilities include a weight-distance tax, tolls, an income tax hike, and increases in the general sales tax. The subcommittee said it rejected a tax based on vehicle miles because the technology was inadequate.

The revenue transfer subcommittee is focusing on re-directing revenue from sales of new and used vehicles.

The sales tax on new cars currently contributes $145 million to the general fund, along with $90 million from the sales tax on used cars.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.