Agriculture AMPed Up Transportation

Agribusiness: What the Highway-Funding Quandary Means for Arkansas Agriculture

February/March 2016 Issue


There was some grumbling in 2008 when Arkansas voters approved Amendment 86. Although the constitutional amendment that authorized a fiscal legislative session in even-numbered years passed with 69 percent of the vote, Gov. Mike Beebe thought the ballot language had misled voters, and some legislators wanted to initiate another ballot issue to repeal the fiscal session.

And now? No big deal, although a few people are still miffed the 2016 session was moved to April to accommodate the early primary.

“The fiscal sessions that they’ve had so far have been pretty lean, pretty short, and from what we understand they’re going to attempt to make this one the same way,” said Jeff Pitchford, Arkansas Farm Bureau director of public policy for state affairs.

Added state Rep. David Hillman, D-Almyra, the vice chair of the House Committee on Agriculture, Forestry and Economic Development, “Most of our budget work was done during the regular session, and basically what we’re going to be doing this time is just rubber stamping what we have already decided to do.”

What has Hillman concerned is what will happen next year and beyond. The veteran farm leader told AMP in the 2017 regular session, “We’re going to have to make some decisions at that time about what state services we want to cut… or is there a way with growth in the tax base we won’t have to make any, and we can continue the same services that we’ve had in the past from the state?”

Hillman said he will take a stand on continuing to allow growth in K-12 education funding based on revenue increases; he also plans to fight to maintain spending on programs important to rural Arkansas.

Pitchford said Farm Bureau hopes to work some additional money into the fiscal session for the University of Arkansas Division of Agriculture. Last year, the Legislature approved a one-time infusion of $3 million for the division from the General Improvement Fund, and Pitchford said while that will help this year, “We’re going to continue to push and to ask the governor and Legislature to look at an increase in base funding. Our members rely on those extension programs and extension agents in each county, and they’ve had a hard time keeping those positions filled because of turnover and lack of increases for salaries.”

While the fiscal sessions have become routine, the Arkansas General Assembly finds itself swimming in special sessions. Last year, a special session was convened to move the primary and judicial elections, and to approve a bond issue to help the Lockheed Martin facility in Camden. This year, there will likely be more than one additional session. A legislative task force has suggested changes that would maintain but reduce the cost of the private option for health care; lawmakers are also expected to tackle prison reform.

But for the farm community, the big issue will likely be highway funding. In December, the Governor’s Working Group on Highway Funding called for developing “a strategy to net $110 million in additional revenue annually to the Highway Department over the next one to three years,” rising to $160 million when federal obligations and shares distributed to cities and counties are taken into account. While the working group is still looking for a long-term source for those funds, it came up with several possible immediate steps, including higher fuel taxes and a transfer of vehicle tax money out of general revenues.

“We’re very much in favor of an aggressive highway program because of the farm-to-market roads. In Arkansas there are thousands of those types of roads across the state, and they’re things that our members are very much interested in,” Pitchford told AMP.

Although Farm Bureau has expressed support for sources of highway revenue in the past, like the 2012 bond issue that earmarked an increase in the sales tax for highway improvement, Pitchford said they’ll wait to see what the Legislature and Gov. Asa Hutchinson have to say before offering a recommendation. (The governor has said he plans to call special legislative sessions to cover highway funding and the private option, but had not announced any specifics as of press time.)

Pitchford’s colleague at Farm Bureau, Director of Public Relations Rob Anderson, said, “We have several options that we prefer for how that could be paid for, but we’re not pushing a tax; that’s just one of the options that we would support.”

Hillman has a novel suggestion — a gas tax that’s price-based, rather than volume-based.

“That way, as the price goes up, the revenue would go up,” he explains. “What we’ve got now is decreasing revenue and increasing expenses on roads, so we’re going to have to do something about that.”

He opposes using general revenues for transportation, though that’s what Hutchinson has proposed, saying, “I’ve always felt that the people who use roads and benefit from them ought to be the ones to pay for it.”

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