Governor Asa Hutchinson Announces New Highway Program; No New Taxes

From Press Relesase:

PROVIDES MATCH FOR $2 BILLION IN FEDERAL HIGHWAY FUNDING OVER 10 YEARS

LITTLE ROCK – At a news conference at the Capitol today, Governor Asa Hutchinson announced his recommendation for a new highway program for the state.

The Governor’s recommendation provides a state investment of approximately three-quarters of a billion dollars to the Highway Department over the next 10 years – based off of the previous 10 year history – without raising taxes or introducing any new taxes to Arkansans. (More details can be found in the attached document.) This state match allows Arkansas to access over $2 billion in federal highway money over the next 10 years.

Governor Hutchinson released the statement below following today’s announcement:

“In addition to a state investment of more than three-quarters of a billion dollars over 10 years, this new program allows us to access billions of dollars in federal highway money – without raising taxes.

“Highway infrastructure is key to our state’s economic development and growth, and this plan should act as a catalyst for that growth by allowing us to increase our investment in highways without placing an unnecessary burden on Arkansas taxpayers. I am pleased to say that it accomplishes both objectives.

"I will also ask the Arkansas Highway Department and Commission to be responsive to increased legislative oversight in light of the transfer of general revenues to the Highway program. It is important that the Highway Commission initiate internal reform which assures the public that taxpayer dollars are being wisely, efficiently and fairly spent."

More information on the proposed program:

· There are NO new taxes as part of this program.

· This plan will generate 3/4 of a billion dollars in new highway funding over 10 years.

· The first year is unallocated surplus of $40 million - $20 million of which will be transferred from FY15’s unobligated surplus, while the other $20 million will come from the Governor’s rainy day fund.

· In subsequent years, the highway program will generate revenue from sales tax on new and used cars to be phased in over 5 years and capped at $25 million. (Efficiency efforts and other budget savings will offset any lost revenue.)

· $4 million will be directed from General Revenue for diesel tax collection each year. $2.7 million of which will go to the State Highway Department. The other $1.3 million will go to cities and counties.

· $5.4 million will be redirected from Central Services for the amount collected from the 1/2 cent sales tax for roads.

· 25% of the unallocated surplus will transfer to the Highway Department for after RSA obligations are met.