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Largest Highway Spending Plan in State’s History Announced by Governor and Legislature

Governor Asa Hutchinson joined legislative leadership this morning to announce details of a proposed $300 million, long-term highway plan. At $300 million in increased annual revenue to State Highways, this plan would be the largest in Arkansas’s history.

The plan is broken down into two parts, the first of which is an extension of the half-cent sales tax of 2012 through a Referred Amendment for 2020. This would generate $205,590,000 a year for highways.

A large portion (roughly 28 percent) of the current half-cent sales tax will go toward paying off bonds for road projects. By extending the half-cent sales tax, the state would be able to shift to a “pay as we go” system.

The second part of the plan would produce $95,071,995 in additional, ongoing funding. That legislation will include:

New index on gas (+$0.03) and diesel (+$0.06) prices = $58,097,076 (net to State)

Additional registration fees for hybrid and electric vehicles = $1,974,919

Dedicated casino tax revenues and Restricted Reserve Funds or other General Revenue = $35 million minimum, guaranteed

In addition to the extension of the half-cent sales tax, other components of this plan, such as the registration fees on hybrid and electric vehicles and the casino tax revenues, have future growth potential. This upward trajectory in funding will provide certainty for our highway program where none previously existed.

In addition to the $300 million to the Highway Department, cities and counties will receive $110 million annually to help maintain local streets and roads.

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