- Associated Press - Saturday, May 14, 2016

LITTLE ROCK, Ark. (AP) - No matter what happens when Arkansas lawmakers meet this week to take up the governor’s highway funding plan, one thing is clear: This won’t be the end of the debate over how to pay for the state’s road needs.

With time running out to build consensus and an election year climate that makes tax hikes a tough sell, the special session that begins Thursday will likely focus on a short-term plan to tap into Arkansas’ surplus and general revenue for roads. But it will also offer a preview of the challenges lawmakers face later in trying to come up with a longer-term solution to close the road funding gap.

“I know the desire is there,” House Speaker Jeremy Gillam said. “The biggest hurdle we face in the timeframe we’re in right now is there are a lot of ideas out there to reach those goals, but they’re all very complex.”

Hutchinson hasn’t yet issued the formal proclamation calling lawmakers into session, and it’s unclear whether he’ll craft it in a way that would prevent competing plans from being considered. But the Republican governor and legislative leaders are offering little hope that they see a path forward for any tax increases in the near term.

“I’m looking forward to the upcoming special session as we work to address the immediate needs of our state’s highways without raising taxes,” Hutchinson tweeted last week.

The ideas that have been floated include raising the state’s motor fuel tax or partially removing the sales tax exemption on fuel. But Senate leaders have said any tax increase would need to be offset by a tax cut elsewhere, a move that would stretch a tight budget even more.

The desire for a “revenue neutral” approach reflects a majority-Republican Legislature where several members have signed pledges vowing to never raise taxes. That desire is also fueled by an election in less than six months, and several lawmakers from both parties wary of being painted as pro-tax by rivals or outside groups.

But Senate President Jonathan Dismang says the desire for a tax increase to be offset by a tax cut will remain even outside of an election year.

“At this point I don’t believe there is a bill out there that is revenue neutral,” Dismang said. “There’s going to have to be some time taken to develop that and ultimately gain support from the legislative body, which just doesn’t exist” at this time.

Lawmakers who had been floating the possibility of a tax increase say the sheer size of the state’s highway system - the 12th largest in the nation - shows how badly a longer term fix is needed.

“That in itself ought to put it in perspective that we’ve got to figure out some kind of financial vehicle that will take care of all this infrastructure and any type of deferred maintenance,” said Republican Sen. Jimmy Hickey.

The challenge facing the state’s highways isn’t a new one. State transportation officials have long warned that the current funding system, which relies primarily on gas and diesel taxes, faces a growing gap between revenue and needs. Highway officials say they have $20.4 billion in needs over the next decade, but expect only $3.6 billion in state and federal funding.

“At some point this is about the safety and well-being of people driving on our roads,” said House Minority Leader Michael John Gray, a Democrat from Augusta. “I just can’t believe there won’t be some long term solutions addressed soon.”

Hutchinson’s plan is likely to face resistance from Democrats, who are generally opposed to relying on one-time funds and diverting general revenue for the state’s road needs. The top Democrat in the Senate says coming up with a longer term highway plan is going to mean some tough choices for lawmakers.

“If we can have a real deep discussion and debate about this and without just a knee jerk reaction of no new taxes, I think that’s the only way we’re going to come up with a comprehensive plan,” Senate Minority Leader Keith Ingram, a Democrat from West Memphis, said.


Andrew DeMillo has covered Arkansas government and politics for The Associated Press since 2005. Follow him on Twitter at www.twitter.com/ademillo

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