About $19 Billion in Highway Needs Lurk in Ark. Legislature

January 24, 2007

Arkansas’ top highway official urged legislators on Jan. 22 to consider additional revenue sources – a new bond issue, sales tax revenues from car products, new fees or a combination of all those – to fill a gap of nearly $15 billion between what his agency expects and what is needed for the state’s roadways over the next decade.

“Whether or not the time is right for any of them or all of them I think lies with the wisdom of the General Assembly,” said Dan Flowers, director of the state Highway and Transportation Department. “We think it’s important that we lay out the needs in Arkansas. We stand ready to do what we can to utilize any funds we might get.”

Flowers spoke before the Senate Transportation, Technology and Legislative Affairs Committee, outlining the needs for Arkansas’ 655-mile interstate highways and other roads.

About 72 percent of the highways are in “good shape,” Flowers said.

His department expects to receive about $4.1 billion in the next 10 years, Flowers said, but highway needs over that period are estimated at $19 billion. That leaves officials “short by a long way,” he said.

Meanwhile, costs continue to rise for asphalt, cement and steel that are getting “soaked up” by the world market and hurricane reconstruction, Flowers said.

To cover the costs, Flowers gave legislators several options, including dedicating sales taxes paid on items related to roads and automobiles to highway projects. The highway commission unanimously called on the Legislature to approve the change last year.

But taking the sales tax collected on repair parts and services, for instance, would bring in only $164 million, of which 30 percent would be split between cities and counties. Flowers said the idea of privatizing some roads received no interest from business and tolls so far have only taken off for the Bella Vista bypass in northwest Arkansas.

Sen. Bobby Glover, D-Carlisle, said he would consider bringing another bond issue before voters. In 2005, voters rejected a highway bond issue that would have allowed the Arkansas Highway Commission to have $575 million in bonds out at any one time.

Glover said he had talked with the state’s trucking industry, which opposed the last measure. Voters last approved a highway bond issue in 1999

“I think that’s so vital,” Glover said. “If we don’t, we’ll find ourselves in the same condition in when we passed the bond issue.”

Sen. Kim Hendren, R-Gravette, questioned whether tax relief needed to come only after repairs to the state’s highway system.

“I’ve asked constituents up in northwest Arkansas would you rather have a cut … in your sales tax on groceries or would you rather have a road where it didn’t take you two hours to get to work,” Hendren said. “You know what those people say? Put it there.”

Gov. Mike Beebe, who campaigned on cutting the sales tax collected on groceries, has said highways are a priority for his administration. But his address to the Legislature this month did not mention how to deal with the state’s growing transportation needs.

As of Monday, no bills had been filed addressing state highway funding, and Flowers said he had yet to see any strong legislative support for his department’s estimated needs.

“I guess we’ll just have to see,” he said.

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