Road tax is simple: Pay more, get more


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When it comes to the half-cent sales tax for highways on this year’s ballot, the question is simple: Do voters want better highways, do they want to pay for them, and if so, how?

Proposed Constitutional Amendment 1 asks voters to approve a 10-year, half-cent sales tax to fund a $1.8 billion road construction program. The revenue generated would target 17 highway projects as part of a continuing effort to create a four-lane network across the state. Three of the projects are widening Interstate 540 to six lanes between Fayetteville and Bentonville, widening I-40 to six lanes between Little Rock and Conway, and completing the four-laning of Arkansas 18 between Jonesboro and Blytheville.

Also, 30 percent of the money raised by the tax would go to the state’s cities and counties for local road projects.

Last year, 81 percent of voters approved an interstate rehabilitation program, but that request involved continuing an existing program with no new taxes.

Why was that not enough? The Arkansas Highway and Transportation Department says it has $23 billion in needs during the next 10 years but only anticipates $4 billion in revenue over that time period. With the federal government already $16 trillion in debt and Congress unable to get much done, that extra money isn’t coming from Washington.

Supporters say the program would address critical highway priorities, create construction jobs, spur economic activity and make roads safer. They say the amendment, by paying for these 17 projects, would free other revenues for use elsewhere.

Pretty good deal, huh? Well, it is a half-cent sales tax – and not just an additional tax, but also a new kind. Traditionally, highways primarily have been funded by motor fuels taxes, which has been a good thing because those who benefit directly from a government service are the ones paying for it. The boring government term for that is “user fee.” Under this proposal, gasoline is specifically exempted, as are food and medicine.

Plus, the gas tax is more transparent than a sales tax. In Arkansas, you pay a combined 40.2 cents per gallon of gasoline and 47.2 cents per gallon of diesel in state and federal taxes. If you buy 10 gallons of gasoline, you drive away from the pump knowing you just handed the government $4.02 to build and maintain the road on which you’re driving. If you’re buying diesel, it’s $4.72.

But there’s a growing problem with the motor fuels tax: Vehicles are using less fuel, which means drivers are paying less in fuel taxes.

One way to solve that is to raise the motor fuels tax at the federal level, where it has remained 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel since 1993 despite roads being a lot more expensive to build than they used to be. (Crude oil, after all, is a primary ingredient in asphalt.) In the two-year highway bill recently passed by Congress, an additional eight cents per gallon would have allowed highways to be funded at current levels using the motor fuels tax.

But members of Congress believe raising the tax at a time when gas is pushing $4 per gallon will get them permanently sent home, so this time they found, and raised, the money elsewhere.

It won’t be so easy in the near future. Cars are becoming ever more fuel-efficient or, in the case of electric vehicles, don’t use fuel at all. At some point, Congress will have to make some tough choices: Raise motor fuels taxes, find other revenue sources, cut government elsewhere or just do without. Of course, there’s always that other popular option: Say yes to everybody and pass the debt on to our kids.

As for this November, it comes down to this. A yes vote would mean Arkansas would be funding highways using a new tax that’s not even close to a user fee. On the flip side, there would be more money for highways at a time when money for highways is hard to come by.

You pay more, and you get more. You pay less, and you get less. That may not be an easy choice, but it is a simple one.

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Steve Brawner is an independent journalist in Arkansas. His blog — Independent Arkansas — is linked at arkansasnews.com. His e-mail address is brawnersteve@mac.com