Millions at stake for city, county in Arkansas highway sales tax vote

Arkansas Gov. Asa Hutchinson, center, speaks at a news conference Friday, Nov.  15, 2019, at the Poultry Federation in Little Rock about the campaign to extend a half-cent sales tax for highways. Hutchinson on Wednesday called the effort to keep the tax his top priority among this year's ballot initiatives. The half-cent tax approved by voters in 2012 is to expire in 2023 unless voters extend it by approving a ballot measure that is part of a highway funding package passed by the Legislature in 2019.
Arkansas Gov. Asa Hutchinson, center, speaks at a news conference Friday, Nov. 15, 2019, at the Poultry Federation in Little Rock about the campaign to extend a half-cent sales tax for highways. Hutchinson on Wednesday called the effort to keep the tax his top priority among this year's ballot initiatives. The half-cent tax approved by voters in 2012 is to expire in 2023 unless voters extend it by approving a ballot measure that is part of a highway funding package passed by the Legislature in 2019.

TEXARKANA, Ark. - Supporters and opponents are ramping up their efforts to persuade voters less than six weeks from a statewide election that will decide whether Texarkana and Miller County will continue to receive millions of dollars in sales tax revenue set aside for road improvements.

Issue 1 on November's General Election ballot asks voters to approve an amendment to the Arkansas Constitution that would make permanent a half-cent sales tax to fund road construction and maintenance. Voters approved the tax on a temporary basis in 2012, and it will expire in 2023, when $1.3 billion in bonds are repaid, if the amendment fails this year.

Counties and cities each get 15% of the collected tax, which has added more than $3.7 million to Miller County's coffers and more than $4.5 million to Texarkana's since 2013.

Overall, the Arkansas Department of Finance and Administration estimates the tax will generate $293.7 million a year to begin, with about $205.6 million going toward state highways, $44 million going to counties and $44 million to cities.

Texarkana City Manager Kenny Haskin credits revenues from the tax with funding the repavement of East 50th Street, Grim Street, Sanderson Lane and East 19th Street, as well as drainage improvements and continual street maintenance in the city. His prediction of what would happen if those funds stop coming in is dire.

"The loss of revenue will essentially dismantle the city's Street Division, which is solely funded by state turnback and the half-cent tax. This will result in more potholes throughout the city, more deterioration and failures of existing roads, reduction of staff that is already at bare minimum, and lack of funds for road and drainage improvements.

"Road maintenance will be cut to 60% of what is currently being performed, meaning the city's cost for road issues will be triple that of current repair needs," Haskin said in a statement.

State Sen. Jimmy Hickey Jr., R-Texarkana, said making up for loss of the tax's revenue would be difficult.

"We already don't have enough to fund highways, anyway," he said. "That would be an issue that I don't know how we'd deal with. There's no way that you could take it out of general revenue. It's not there."

Speaking to lobbying group Arkansas Good Roads Foundation on Wednesday, Gov. Asa Hutchinson called Issue 1 his highest priority for this year's election and announced an Oct. 19 "flyaround" campaign to tout the measure in cities around the state.

Hutchinson said passage of the measure is essential to the long-term stability of highway funding and would support economic growth and employment.

"Every aspect of life is dependent on the good roads supported by Issue 1," he said. "If it fails, that means we lose jobs."

Hutchinson acknowledged organized opposition and urged supporters to "push to the finish line" between now and Election Day.

An opposition group called the No Permanent Tax, No on Issue 1 Committee held a virtual news conference Friday, bringing together a collection of tax-reform, urban planning and environmental activists to decry the measure as burdensome and practically irreversible.

Arkansas already has the second-highest state and local sales tax burden in the country, and that affects middle- and low-income residents disproportionately in a state where the poverty rate is more than 16%, said Ryan Norris, the committee's chairman and Arkansas director of anti-tax group Americans for Prosperity.

The group argues that increasing the portion of the Arkansas Department of Transportation's budget allocated for highway maintenance, now about 10%, as well as using current finances efficiently, would provide enough road funding.

It also argues against the permanence of the tax. Though amending the constitution again to cancel the tax is possible, the expense and effort required to do so make Hutchinson's claims that it is reversible "very, very disingenuous," Norris said.

The opposition group also plans to increase its campaigning in the coming weeks, citing a broad-based, grassroots campaign.

Election Day is Nov. 3.

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