Arkansas Senate Relents, Votes To Phase in Tax Hike on Truckers

The Senate backtracked Wednesday from imposing an immediate 4-cent-a-gallon diesel tax increase to fund highway improvements and settled for phasing in the increase over 12 months.

The 32-2 vote to impose 2 cents immediately and add 2 cents more in a year was a concession to the House, which last week refused to go along with Senate efforts to impose a greater tax burden on truckers, whose big rigs do much more damage to roads than passenger vehicles.

"If that's all that will pass the House, I'm willing to do it," said Sen. Wayne Dowd, who had pushed the tougher tax burden for truckers. "I'm still a proponent of 4 cents immediately. But it appears not to be possible to pass it in the House. We have to agree or we have no law."

The bill goes back to the House, where lawmakers anticipated the amendment's swift approval and final passage as early as Friday.

The Senate also gave final approval to a pair of bills to provide property tax relief to older homeowners and the disabled.

Wednesday's Senate vote also was something of a victory for the trucking industry, which acquiesced to a 4-cent a gallon increase but vehemently opposed an immediate $20 million tax increase that smaller firms could not swiftly pass on to shippers.

Highway officials estimated the change would lower tax proceeds by about $11.5 million in the first two years of the higher taxes.

Sen. Jon Fitch said lawmakers were selling out Arkansas motorists, who drive farther to work than workers in any other state because of Arkansas is largely a rural state.

"We're telling (them) there's an $11.5 million that could have been used for your roads, but the truckers talked to the House so much and the governor of this state that neither of which had the courage to represent you," Fitch complained. "We are telling the driving public that we can't tax those poor truckers $11.5 million more when we taxed you $13 million more in one year."

The highway package would phase in a 3-cent a gallon gas tax increase a penny a year over three years. Highway officials say every penny of the gas tax generates about $13 million.

Huckabee said he was pleased with the compromise. "It's reasonable. It's a good overall consensus," the governor said.

Fuel tax increases are part of a package that also includes Huckabee's $575 million bond issue to speed up interstate improvements. The bond bill, which has passed both chambers, was

mended Wednesday by the Senate to conform to the amended fuel tax bill. Huckabee's signature will refer the bond issue to a public vote.

Together, the bills would pay for repairing more than 300 miles of crumbling interstates, pump millions of extra dollars into non-interstate highway construction that started in 1991 and

llocate millions more for county roads and city streets.