Arkansas Governor Proposes Tapping Surplus, General Funds for Transportation
LITTLE ROCK, AR Governor Asa Hutchinson proposed a set of funding transfers to shore up the Arkansas Highway and Transportation Department's budget enough to match available levels of federal dollars, but would come short of annual transportation increases recommended by his hand-picked advisory panel.
The governor said his plan, if backed by the General Assembly, would boost AHTD funding by $47 million this year, $339 million over the next five years and about $750 million in 10 years - all without new taxes.
It would also allow the state agency to meet its local-match requirements to utilize $2 billion in projected federal revenue for Arkansas over the next decade, Hutchinson said.
By contrast, an advisory task force Hutchinson set up last year to study transportation needs called for reaching within three years a target of $160 million in additional annual funding. It listed funding options but did not endorse specific plans.
His plan includes tapping state budget surpluses and shifting millions of dollars a year to the AHTD from some transportation-related tax revenues that now go into the state's general fund.
For this year, to jumpstart the AHTD's extra financing, it would shift $40 million from the general revenue surplus, drawn evenly from a state "rainy day fund" and the Governor's Discretionary Fund. This is one-time funding, but it would help the AHTD get over its most immediate hurdle of matching federal funds this year.
The plan would also dedicate $5.4 million annually to transportation that now goes into a "Central Services Fund," revenue derived from a temporary half-cent sales tax increase that expires in 2023. And it would redirect part of the sales and use tax on the sale of new and used vehicles, at varying amounts phased in over five years but starting with $1.5 million immediately.
However, after this year most of the money it would put into transportation would come from dedicating 25 percent of the unallocated general revenue surplus each year to the highway fund, beginning in 2018. While that would not provide guaranteed additional annual funding for highways, Hutchinson said that had the provision been in place for the past decade it would have provided an average of $48 million a year.
If the legislature accepts his plan, Hutchinson expects it to generate $64 million for the AHTD in fiscal 2018, and grow to an extra $81 million in 2021.