Enjoy low gas prices while they last
Are you ready to pay more at the pump?
I certainly hope so because the taxes we pay for our gasoline in Arkansas are going up, up and away!
Ever since Gov. Asa Hutchinson made a re-election campaign promise to finally get a long term road funding plan approved during this session of the Legislature, you knew there was really only one way that was happening.
That is even after years of haggling, debating and shuffling ideas around going back to former Gov.
Mike Beebe’s administration when few politicians wanted any part of suggesting imposing higher gasoline and diesel taxes on their constituents.
With such expediency we now ask why, all of a sudden, all these now political fearless elected representatives of ours were so anxious to jump all over Hutchinson’s road plan when they have been tossing around this political “hot potato” for years?
What these politicians sent to Hutchinson is legislation that will raise $95 million more a year so that the always complaining State Department of Transportation civil servants can spend it on road, bridge and highway projects they claim they didn’t have enough of our tax dollars to pay for them.
So, a levy will be placed on the wholesale sales tax on gasoline and diesel fuel: increase registration fees on electric and hybrid vehicles; and transfer at least $35 million a year in casino revenue, restricted reserve funds and other tax dollars designated by the governor to the DOT.
That means the wholesale sales will increase the tax on gas by 3 cents a gallon, to 24.5 cents a gallon, not including the federal fuel tax of 18.4 cents per gallon, and the tax on diesel by 6 cents a gallon, to 28.5 cents a gallon.
And, to insure this taxing formula keeps pace with inflation there is an indexing formula that will limit future increases to one-tenth of a cent a year, meaning the maximum increase would be 1 percent over a 10-year-period.
So, let’s do a comparison of state fuel taxes in neighboring states beginning with Tennessee which is 21 cents per gallon; Missouri, 17 cents per gal- lon, Mississippi, 18 cents and Oklahoma, 17 cents per gallon. Add 18.4 cents for federal fuel tax, which makes Arkansas’s gasoline tax the highest.
Once again, there is no doubt that the old funding formula was antiquated and failed to generate enough tax dollars to deal with inflation not to men- tion the lost revenue resulting from more fuel effi- cient vehicles.
The debate over additional road funding came up with scores of ideas and notable suggestions including taking existing tax dollars generate from the sale of new and used vehicles, vehicle maintenance, license and registration fees, tires and other vehicle related purchases and transfer those revenues to the DOT. Hutchinson was strongly opposed to that suggestion and vowed to veto any road funding legislation that included such a tax transfer even though it would not have affected Arkansans at the pump.
One concern that now seems to be addressed is accountability, DOT efficiency concerns and legislative oversight. The DOT is an independent state agency and is not under the control of the governor’s administration which makes it important that there is some type of accountability measures put in place as to exactly how our tax dollars are spent.
We’re seeing prices lower than they have been in years because of the COVID-19 crisis. But just wait until people feel safe leaving their homes again, and those prices will be up, up and away!