Arkansas News Bureau

LITTLE ROCK — Advocates for renewing a $575 million highway bond program breezed to victory in a November special election with a simple but effective message to voters: Raise new highway maintenance funds without raising taxes.   

Now they’re gearing up for a very "different campaign" next year to pay for a broader highway construction by adding taxes on top of taxes. 

The Legislature this year referred to the 2012 general election ballot a proposed constitutional amendment that would raise the state’s 6 percent sales tax to 6 1/2 percent to fund a $1.8 billion program that would connect all corners of the state with four-lane highways. 

The state sales tax hike would be on top of existing local sales taxes in many cities and counties around the state, and would come on the heels of local tax increases approved this year in 21 cities and three counties. 

"There is no question it will be a tough sell," even with the prospects for job creation and economic development, said Randy Zook, president and CEO of the Arkansas State Chamber of Commerce-Associated Industries of Arkansas. 

Zook also is treasurer of Move Arkansas Forward, a group formed to promote the highway bond renewal program and to push for the highway tax increase proposal.

The road bond measure received more than 80 percent of the vote in the November special election. Move Arkansas Forward spokesman Craig Douglass said next year’s highway funding vote "will be a different campaign."

Under the proposed constitutional amendment, a half-cent sales tax increase would be in effect for 10 years. Highway construction under the plan would focus primarily on a creating a statewide four-lane grid and adding capacity to existing four-lane highways.

The state would receive 70 percent of the proceeds, an estimated $1.1 billion, with cities and counties sharing the remaining 30 percent, about $700 million.

The proposal also requires that proceeds from 1 cent of the current state motor fuels tax be diverted to a permanent state aid program for cities. The provision would generate about $20 million annually, said Scott Bennett, director of the Arkansas Highway and Transportation Department.

The counties have had a similar program in place for several years.

Bennett has said approval of the half-cent sales tax increase would fund a number of large, expensive projects across Arkansas, including replacement of the Interstate 30 bridge over the Arkansas River between Little Rock and North Little Rock, widening I-40 between Little Rock and Conway, and widening U.S. 67-167 between Jacksonville and Cabot.

Two lanes of the proposed Bella Vista bypass also would be completed in northwestern Arkansas, and in the south, U.S. 82 between Magnolia and El Dorado would be widened, as would a number of other heavily traveled highways across the state, Bennett said.

He estimated that as many as 50,000 jobs would be created.

"There could be a lot of work out there in the next few years," the state highway director said. "It’s an exciting possibility."

Zook said Move Arkansas Forward’s campaign for the proposal would focus on educating the public about the potential for economic improvement.

"We think that once people have all the facts ... and have a clear picture of what will be possible with this effort, and the fact that there is a time limit applied to (the tax increase), there will be a pretty clear picture of what can be done, and I think people will find good value in it and will make a positive choice," Zook said. "It’s going to take a lot of work to make that happen."

State highway officials have told lawmakers several times in recent years that the state’s source of funding for highway construction is inadequate.

Currently, Arkansas depends on increasingly flat fuel tax revenue to pay for road building. Highway officials estimate nearly $20 billion in highway needs over the next decade and anticipate revenue of about $4 billion.

Crucial to the highway tax increase effort, supporters say, would be the support of Gov. Mike Beebe. The governor was featured in television commercials for the road bond renewal drive but has remained steadfastly noncommittal to the highway tax increase proposal.  

About all Beebe has said about the plan is that in the current economy voters would be hard-pressed to support a tax increase.

Support from cities and counties also could give the plan a boost.

Preston Scroggins, president of the Arkansas County Judge’s Association, said county judges likely will decide at a meeting in February whether to endorse the tax increase.  

While the potential infusion of money for county roads would be great, county judges have some concerns about raising the state sales tax, Scroggins said.

Don Zimmerman, executive director of the Arkansas Municipal League, said the organization will consider whether to support the tax hike at a conference next June. 

Municipal officials considered the measure at its conference this year but deferred making a decision whether to support it, in part because of local sales tax votes pending in so many communities.  

"Some of the folks said, ‘Well, you know, that may discourage people from voting them locally, if the state’s sales tax gets too high,’" Zimmerman said.

Douglass said the key in promoting the half-cent sales tax will be educating various regions of the state on what kind of highway projects they could expect, and reminding them how much money cities and counties would receive.

"Rather than a statewide effort, I would suspect that the (Move Arkansas Forward) committee will regionalize the campaign based on projects," he said. "They also will need to stress that it is a temporary sales tax for specific projects."