Alternatives to more taxes need serious consideration
It is obvious the Arkansas Highway Commission has adopted the ancient adage, “If at first you don’t succeed, try, try again,” as evident in its recent unanimous support of going directly to the voters with a ballot initiative that would raise up to $400 million annually.
Don’t be fooled folks, the proposed sources for funding this initiated act or even a constitutional amendment will require either increased sales taxes or higher fuel taxation. And, know this, each penny of fuel tax equates to $14 million in funding for the Highway Department. A 14.2-cent increase in fuel taxes will only raise $200 million annually, according to the department and to get the $400 million this commission says it needs will mean that 28.4 cents in new taxes will be needed.
Now then, Arkansas’ current tax on gasoline is 21.5 cents per gallon and fore diesel, it’s 22.5 cents per gallon. Add to that the current federal fuel tax of 40.2 cents per gallon for gasoline and 47.2 cents per gallon for diesel.
Let’s just say, for argument sake, that voters somehow get hoodwinked into voting for this 28.4 cents per gallon increase. That would bring a combined total of state and federal fuel taxes to 90.1 cents a gallon.
Okay, let’s be realistic and admit that this will never be voted on but, what we expect these bureaucrats will push for is their previous request to lawmakers of a 6.5 percent sales tax on wholesale fuel prices.
Remember that proposal was presented to the General Assembly earlier this year and lawmakers made it clear they didn’t want any part of that political hot potato, and suggested at the time that the highway boys need to go begging the voters for what they want. It was estimated at that time that the 6.5 cent increase, in addition to what consumers are already shelling out would generate $200 million annually, still far less that what the highway boys say they need to keep pace with road, highway and bridge demands.
We’ve said this before, we’ll say it again, and we’ll continue to point out that there are other revenue sources that can be tapped without raising new taxes.
There has been a long-standing proposal to use existing revenue from state sales taxes on new and used vehicles, taxes charged with vehicle repairs and tax revenues from the sale of tires and vehicle accessories. While some legislative and gubernatorial panels have endorsed this good source of funding, lawmakers have bowed to the pressures from bureaucrats representing other segments of government that claim that revenue belongs to them and politicians had better keep their greedy hands off money they say belongs to them.
So then, these politicians have found themselves repeatedly between a rock and a hard place. While they don’t want to be viewed by their constituents as tax mongers these politicians also fear the repercussions from angry agency heads and their employees.
Let’s make it clear that the previous proposals to steer revenue from sales taxes on new and used vehicles would not negatively affect current revenue streams to these state agencies, all of which by the way, have areas that could be trimmed and made more efficient.
With this said, let’s all of us be aware of the facts and circumstances, and let’s not be snookered into voting for new taxes without knowing all the possible alternatives.