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The Highway Funding Plan

I want to discuss the details of the $300 million highway funding plan that I presented this week that is necessary to repair and maintain Arkansas’s existing highways and bridges and to expand our roadways as the state grows.

According to Arkansas Department of Transportation, the department would be able to improve 7,300 of the 7,900 miles of the Arkansas highway network that carries 90 percent of all traffic daily. The plan would create an estimated 3,900 jobs annually and generate $8 billion in economic activity.

A large portion of the funding for the plan would come from new revenues from casinos, as well as existing state revenues.

The plan calls for a $100 registration fee for hybrid vehicles and a $200 fee for electric vehicles. These registration fees are necessary so that those vehicles will contribute their fair share to road maintenance.

The plan will draw on dedicated revenue from casinos for highway construction, with a commitment to fund at least $35 million annually in new money.

This represents a new and unprecedented commitment of $85 million annually when it is combined with our existing transfer of $50 million each year to highways.

Another piece of the plan calls for the continuation of the existing half-cent state sales tax, which now supports highway construction bonds but will expire in 2023. I am asking the General Assembly to refer this to the ballot box for a vote in 2020.

While the plan does include a necessary increase in user fees, the tax cuts of the past four years more than cover it. To put it in perspective, an Arkansan driving 20,000 miles annually in a car that averages 18 miles to the gallon will use 555 gallons of gas. Under this plan, that driver would pay an additional $33 annually, or $2.70 a month.

But under the middle-income tax cut I signed into law in 2015, Arkansans who earn $35,000 a year save $110 in taxes; those who earn $50,000 save $246 in taxes; and those who earn $75,000 save $470 a year.

The tax cuts for low-income earners combined with the decrease in the state’s sales taxes on groceries will be worth $110 million in 2019.

Arkansas’s roads are in urgent need of attention, which is amusingly clear by this quip from the owner of two tire and auto repair shops in central Arkansas, who said, “I like the roads just the way they are.”

We all want to fix our roads and to build new ones where we need them. I am hopeful the members of the General Assembly will pass this plan, which is a long-range strategy to bring our road system up to date and keep it that way far into the future.

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