Ark. Senate Tax Panel Endorses Fuel Tax Hike, Truck Levy Not Debated

The Senate was also to debate an alternative highway plan that would impose a tax on heavy trucks based on their weight and distance traveled. But Sen. Cliff Hoofman had trouble rounding up support for his bill and did not bring it up for a vote Wednesday.

The House bill, endorsed by the Senate Revenue and Taxation Committee, would increase gasoline and diesel taxes by 3 cents a gallon. The panel also approved referring a $575 million bond issue for interstate improvements to voters in a special election. Both votes came after Gov. Mike Huckabee pleaded with the committee not to approved changes that might doom the bill in the House.

Needing a 75 percent majority, backers of the fuel tax increases got 85 votes in the 99-member House last week after weeks of talks produced what Huckabee called a "delicately negotiated compromise."

"We've got an opportunity to do something that would change and fix our highways. If we bugger it up now, we're going to be making a huge mistake," Huckabee told the Senate tax panel.

The governor opposed amendments to the bill intended to tax trucking companies more and to refer the fuel tax increases to voters, along with a proposed $575 million bond issue to speed

nterstate repairs.

"I, with fear and trembling, would go back down to that House and ask them try to concur with yet another change in what has already been a bill changed many times," Huckabee said. "We're really bordering on something that would really be disastrous in terms of getting a bill out of here that we can all live with."

The sponsors agreed to take the proposed changes to the Senate floor, where debate on the House bills is set for March 16.

Under the House tax plan, fuel tax increases would raise $55 million annually when fully implemented. Of the total, $10 million would help finance the road bonds if voters approve the governor's bond program in a special election this summer.

Otherwise, all of the money would go for road improvements under the existing formula — 70 percent to the state Highway and Transportation Department and 15 percent each to cities and counties.

Additionally, a $13 million cap on money for designated county roads would eventually be removed, providing counties an additional $6 million a year.

Sen. Bill Gwatney complained that most of the increases would fall on drivers of passenger vehicles — $13 million per penny of gasoline tax compared to $3 million per penny of

iesel tax.

Sens. Wayne Dowd and Jon Fitch have drafted amendments that would shift more of the burden to trucks.

Dowd would raise the diesel tax increase to 4 cents and impose it immediately, but leave the gasoline tax hike as proposed by the House. Fitch also would raise the diesel tax by 4 cents but would lower the gas tax increase to 2 cents and impose both immediately.

Sen. Gunner DeLay proposes not to change the structure of the House bill, but to refer the proposed fuel tax increases to voters.