LITTLE ROCK -- Voter-approved proposals have helped Arkansas weather declines in state and federal highway funding, and transportation officials are working with state lawmakers on a long-term solution before the proposals expire and projects stall.
The Arkansas State Highway and Transportation Department has increased spending by nearly 70 percent from 2008 to 2013, according to the Federal Highway Administration's annual highway statistics. The department spent nearly $1.8 billion in 2013, the latest year for which numbers were available. Highway spending in Arkansas through the Federal Highway Trust Fund has decreased from $550 million to $523 million over the same period.
Figures compiled by The Associated Press show the total amount of money available to states from the federal fund has declined 3.5 percent during the five-year period ending in 2013. During that span, the amount of inflation-adjusted federal highway money dropped in all states but Alaska and New York.
Compounding the problem with Arkansas' funding outlook is increasing construction costs, said Scott Bennett, the head of Arkansas' highway department. The department projects about $20.4 billion in needs and $3.6 billion in available revenue over the next 10 years.
The state highway department is primarily fueled through gasoline and diesel taxes, which have fallen as vehicles become more efficient. Both the state and federal government are collecting less from such taxes.
Bennett says about $1.1 billion worth of highway improvements over the next two years are in jeopardy because of the condition of the federal fund, and the state has already cut $60 million worth of highway projects this year.
"There has got to have a higher level of investment in highways at the federal and the state level; there's no two ways about it," Bennett said. "The revenue we receive has not even come close to keeping up with inflation."
If that doesn't happen, Bennett said, the public can expect highways to become more deteriorated and congested.
Arkansas has weathered funding shortfalls that have plagued other states thanks to the voters, Bennett said. Arkansans in 2011 approved $575 million in bonds for interstate projects and the next year approved a temporary sales tax increase for highways. Transportation officials say those measures account for much of the spending increases.
Bennett said action is needed before those programs sunset -- or expire -- in about seven years.
"You're talking about our construction program falling off a table because those programs will be finished," he said.
The department could receive a more than half-billion-dollar solution this legislative session from Republican Rep. Dan Douglas of Bentonville. His bill to gradually migrate funds from the state's general revenue to the department over a 10-year period was endorsed by a House committee Thursday. It would divert tax revenue from auto sales, car parts and other vehicle-related items.
State finance officials said the plan would cost the state nearly $35 million in the coming fiscal year and $548 million once fully implemented, or about 6 percent of the state's general revenue.
That plan has already received pushback from educators and other groups that depend on general revenue funds. A spokesman for Republican Gov. Asa Hutchinson on Thursday said the governor "cannot support a bill that undermines the current balanced budget and doesn't provide a consensus on a solution to the funding gap."
Douglas acknowledged that the half-billion figure will be a hard sell, but said the state is on an unsustainable path otherwise.
"We're in trouble," Douglas said. "That's not hard math."
State Desk on 02/22/2015