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10/2/2012 8:40:00 AM Write a Letter to the Editor

Arkansas to Vote on Half-Cent Sales Tax Hike for Road Projects

By Michele Fuetsch, Staff Reporter

This story appears in the Oct. 1 print edition of Transport Topics. Click here to subscribe today.

A proposed constitutional amendment on Arkansas’s ballot this November would add a half-cent to the state’s 6-cent sales tax to raise money for transportation.

Seventy percent of the revenue generated by the half-cent increase would pay for new four-lane highways around the state. The remainder would go to counties and cities to spend on roads.

The half-cent levy would expire after 10 years.

Although the state’s sales tax is 6 cents, cities and counties often have sales taxes of their own, which are as high as 3.5 cents in some areas.

If the half-cent ballot measure is approved, it would be the first time the state has used sales tax revenue for roads, said Lane Kidd, president of the Arkansas Trucking Association.

The association is taking a neutral stance on the ballot measure.

“There were some on the board that had a philosophical difference of opinion on what types of tax revenues should be spent on highways,” Kidd said.

Historically, the association has believed that the fuel tax and vehicle registration fees are the “purest highway user structure” for maintaining highways and bridges, he said.

“And while there are some on the board who thought that using another source of revenue might be smart, there were also opinions . . . that if our industry would oppose fuel tax revenue being used for general revenue purposes, then why wouldn’t the same be true going the other way?”

Under the terms of the proposed amendment, the state would use its portion of the new sales tax revenue to back road-building bonds worth $1.3 billion.

The ballot measure is drawing heavy support from officials and business groups in northwest Arkansas, one of the fastest growing areas in the country and home to Wal-Mart Stores Inc. in Bentonville and Tyson Foods Inc. in Springdale.

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