LITTLE ROCK (AP) — Gov. Mike Beebe called Monday for a special election this fall to ask Arkansas voters to approve up to $575 million in highway bonds, a compromise reached after a key group pulled its support for a larger package with a tax increase.
Beebe signed a proclamation at a press conference that sets the special election for Nov. 8. He repeated several times that the special election was to renew an existing program and wouldn’t raise the state’s diesel tax from its current 22.5 cents per gallon.
"This is not a new tax," Beebe said. "The passage or the failure of this program doesn’t increase or decrease anybody’s taxes. This is separate and apart from any tax change."
Beebe and other officials once supported a 5-cent diesel tax increase and wanted a special election to raise the tax. But the Arkansas Trucking Association backed out of an agreement to support the hike after its internal polling suggested voters could not be persuaded to support it.
If approved, the increase would have authorized the state to issue up to $1.1 billion in bonds, nearly double the current package.
Beebe did not mention the failed proposal in his public comments. But House Speaker Robert Moore, D-Arkansas City, said an increase in funding would eventually be necessary.
"We have a system that we’re going to have to find the political will to address in the future," he said. "Until we get to that point, this is a huge measure to fill in the gap in funding."
In an interview, Moore said lawmakers needed to persuade people "as to the financial problems that are going to escalate the longer we defer the maintenance of our highways." He said leaders in the Arkansas Legislature hadn’t decided whether to try again on a diesel tax hike next year.
Monday’s announcement came weeks after the Arkansas Trucking Association backed out of an agreement to push for a 5-cent diesel tax increase. If approved, the increase would have allowed the state to issue up to $1.1 billion in bonds, nearly double the current package.
Now, the revenue from 4 cents of the diesel tax goes toward the bonding program. If voters reject the measure in November, the diesel tax would remain the same, but money from the tax would not be set aside for construction bonds.
The program was first approved by voters in 1999 and has paid for construction on more than 350 miles of roads, highway officials said.
Highway improvements remain among Arkansas’ biggest unfunded needs, with $23 billion in work needed but only $4 billion in funding.
But a poll commissioned by the trucking group showed voters wouldn’t support a diesel tax hike even when asked "push" questions that included reasons to support the increase, trucking association president Lane Kidd said.
A rejection of a diesel tax hike could have endangered the existing bond system, Kidd said in an interview
"There just doesn’t seem to be enough support in today’s political climate to approve a tax, even when the proceeds of that tax are going to benefit everybody," he said.
After the group pulled its support for a hike, Beebe and Moore said they would move to repeal a sales tax exemption directed at truckers that was passed this year. The exemption would have been paid for by the diesel tax increase.
Beebe announced the special election Monday with Arkansas GOP chairman Doyle Webb and Democratic chairman Will Bond standing on either side. While Republicans opposed a diesel tax hike, Webb supported Beebe’s proposal after being approached by Arkansas Highways Commission chairman Madison Murphy, party spokeswoman Katherine Vasilos said.