Here’s comes the first legislative effort to raise taxes for highways, a plan with negative implications for other state services. UPDATE: Gov. Hutchinson isn’t supportive.

Rep. Dan Douglas of Bentonville, the highway contractors friend in the General Assembly, today filed HB 1260.

Advertisement

Key points:

* When sales tax collections hit $2.5 billion in a year (that will happen soon; they almost hit that level in the year ending June 30, 2018 with $2.42 billion, and hit $1.25 billion for the first six months of this year), sales taxes on cars, trucks, trailers and semi-trailers would be diverted to highway spending. The amount would be capped at $30 million the first year, $60 million the second, $90 million the third and $120 million the fourth. Incremental losses of general revenue to highways means a loss of incremental growth to other state agencies, it should be noted. And remember that the governor is intent on a $200 million a year cut in income taxes if you think there’s growth money aplenty to go around.

Advertisement

* Put a 3.5 percent sales tax on the wholesale price of fuel beginning in 2020. It is currently exempted from the sales tax. That tax would be paid by retailers, but it would be seen at the pump.

Proceeds from this new revenue stream would continue the traditional 70-15-split between state, county and city.

Advertisement

A special sales tax for a bond program and surplus set aside by the governor are already taking general revenue sources for highways.

UPDATE: Gov. Asa Hutchinson gets it. He told KATV:

Pulling additional money from general revenue is not the answer. We are already devoting $50 million a year from state revenue to the Highway Department.

But does that mean a pure new tax is the answer? Another sales tax for highways? While the big trucks pound our interstates regularly to multi-million-dollar piles of rubble?