- Associated Press - Monday, May 23, 2016

LITTLE ROCK, Ark. (AP) - Arkansas Gov. Asa Hutchinson signed into law Monday his plan to raise nearly $50 million for the state’s highways in the coming year, an approach that opponents say could create future budget problems by relying heavily on one-time money.

The legislation, which taps into Arkansas’ surplus, investment returns and other funds for road needs, was signed hours after the Senate gave it final approval on a 21-10 vote. Hutchinson has said the extra money is needed so the state can receive an additional $200 million annually in federal matching highway funds.

“It’s a unique solution for a unique challenge that we have in the state,” the Republican governor said before signing the measure into law.

Hutchinson’s proposal taps into $40 million from the state’s surplus and $1.5 million in investment earnings for the fiscal year that begins July 1. It also ends a requirement that $8.4 million from a half-cent sales tax for roads go toward a fund for constitutional officers.

In future years, it sets aside $20 million in investment earnings and a quarter of the state’s surplus for roads. It also directs $4 million annually in diesel tax revenue that had been going toward general revenue back to roads starting July 1, 2017.

The top Democrat in the Senate called the plan “deeply flawed” and warned it’s using one-time money that the state has relied on for emergency needs or financial downturns.

“This bill is not a highway solution,” Senate Minority Leader Keith Ingram, a Democrat from West Memphis, said. “Instead, it creates a problem, an Arkansas budgetary problem.”

Republican Sen. Bryan King, who voted against the measure, said it provides little certainty for the state’s highways since it depends on whether the state has a surplus each year.

“It’s a gamble, not a plan,” King said.

Democrats and some Republicans had complained the plan didn’t address the highway system’s long-term funding needs and had floated tax increases to raise more money for roads. But Hutchinson said he was opposed to any tax increase, and legislative leaders said any hike would have to include a tax cut elsewhere to win support in the majority-GOP House and Senate.

Lawmakers have said they expect more debate on longer term funding for highways when they return to the Capitol next year. Hutchinson has said he believes any attempt to raise taxes for roads should go before voters. A sponsor of the governor’s highway plan said he was looking at proposing some vehicle-related tax revenue go toward highways, an idea that’s drawn opposition from Democrats who say diverting the money would jeopardize other state services.

“There is some appetite for general revenue transfer, I would say, if it’s a smaller total than what’s been tried in the past,” Republican Rep. Andy Davis said.

Lawmakers ended the special session after giving final approval to the highway plan and more than a dozen other bills, including publicity-rights measure backed by the family of legendary former Arkansas Razorbacks football coach Frank Broyles.

The House and Senate also approved identical versions of a government reorganization bill that moves the state History Commission under the Department of Arkansas Heritage and gives Hutchinson more control over the Governor’s Mansion Commission. The reorganization has been widely criticized by Democrats who say the 105-page proposal was rushed through a session that was intended to focus on the state’s road needs.

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Follow Andrew DeMillo on Twitter at www.twitter.com/ademillo

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