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Sales tax would go to roads

Tuesday, January 24, 2012

CARROLL COUNTY -- A statewide temporary half-cent sales tax proposal that is set to appear on the November General Election ballot promises to generate some $670 million over 10 years for county and city roadwork. Carroll County is expected to receive $4 million and its cities nearly $2 million by decade's end -- if approved.

The tax itself, known as Issue #1, set to expire in 10 years with food and medicine purchases exempt, is projected to generate $2.3 billion overall with three percent taken away for general services. The formula, say supporters, would provide cities and counties with an equal share of 30 percent of the remaining $2.2 billion.

The state would receive 70 percent, to be used to secure four-lane highway construction improvement bonds designed to continue the build-out of four-lane highways and ultimately connect all regions of the state.

Issue supporters say it is similar to the way state turnback funds are distributed: 70 percent to the state, 15 percent to cities, and 15 percent to counties.

However, the Issue #1 amendment goes a step further. According to Craig Douglas, with Move Arkansas Forward, it would also create a State Aid Street Fund with one penny of the existing motor fuels tax dedicated to the new fund -- to be used exclusively for city streets.

"This provision is permanent and will not expire when the temporary half-cent sales tax expires," said Douglas.

Carroll County Judge Sam Barr said he was familiar with the ballot issue but he doesn't expect the measure to pass.

"It has no chance of passing," he said simply. "People are strapped. They can't pay their bills. I don't know how the state is going to improve its roads without it.

"All of our roads are in need of repair but the money is not there. In my mind, there are two ways: try to find the money or try to get along. I am here for whatever the people want."

Berryville Mayor Tim McKinney said the issue was discussed at the municipal league meeting he recently attended in Little Rock.

"I think it's great if you are trying to build streets," he said. "It should generate $93,000 annually for the city. It's a unique partnership with the city and the state. There was a lot of talk about it at the municipal league."

Eureka Springs Mayor Morris Pate had this to say: "It would be great to receive this money if the Arkansas citizens vote for it. We, as a city, can spend every penny we are supposed to get and make it count. I don't anticipate the tax passing but if it does, we will appreciate our share!"

Green Forest Mayor Charlie Reese said, "I am not in favor of an increase in sales tax on the state level at this time even though the city coffers would benefit, estimated at $49,000 per year. I just believe at this time we need to 'hold serve' (table it).

"Now I do agree that the state's roads are in need of replacement and repair," he said. "I also agree that anytime you improve or expand the road system, the region would benefit. However, I believe the federal government should re-allocate some of the spending programs currently in place and target the funds to the nation's and state's infrastructure replacement and repair. That would benefit the economy and jobs picture greatly in our region as well as the nation."

Reese went on to say, "Now, the folks in Little Rock believe that this initiative will pass in November because the voters have never turned down any prior statewide sales tax increases that were placed on the ballot.

"Since this is a Presidential election year," he continued, "we should have a large voter turnout and we will have a good opportunity to see exactly how the citizens feel. I think that a proposed Severance Tax increase is the better way to go since it is passed on to the oil and gas producers, especially given the fact that Arkansas' current effective severance tax rate is around 1.5 percent, which is significantly lower than our neighboring states' 7 percent rate. This tax would not impact energy prices, according to the experts in Arkansas, since all the gas and oil is exported."

Madison Murphy of El Dorado, chairman of the Arkansas Highway and Transportation Commission and co-chairman of Move Arkansas Forward, shared his thoughts.

"Arkansas voters across the state have a great opportunity to improve their county roads and city streets, while providing the highway department with resources to continue the effort of connecting all regions of the state with four-lane highways," he said. "Arkansans in all 75 counties overwhelmingly supported the interstate highway program last year. This is the next step in improving state highways, county roads and city streets, while creating over 40,000 jobs in the process."

Issue supporters also say job creation will be a major benefit of the construction projects to be financed by the temporary tax.

With the state's portion of construction dollars, 41,700 jobs will be created, supported and maintained, they say, and upwards of 18,000 additional jobs will be supported at the city and county level through construction and maintenance projects.

"This approach to local road and street projects, as well as state highway needs, is the fairest way to fund a program that will touch every part of the state," said Mark Lamberth of Batesville, co-chairman of Move Arkansas Forward.

"Everyone will benefit from the spending, and everyone will participate in the funding. Plus, the temporary tax will pay for local projects as determined by local governments, and specific statewide projects for all to see. Remember, by law the tax will be abolished in 10 years."



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