“High-Tax Roadshow” Coming Near You

High-Tax Roadshow” Coming Near You

The Arkansas Highway Commission announced it will have a series of twelve meetings across the state to sell you on the need to pass Issue #1 which is a one-half percent (0.05%) sales tax to be used for highways and roads.  They said they will also be listening to the public’s suggestions on how to use the extra tax money.[i]

Here are 10 things you need to know about their sales pitch for the tax:

1. The Commission wants to convince you they need more money, but whether more money is needed for highways has nothing to do with whether passing another tax is needed.  Having better roads is a question of how Arkansas spends current tax revenue. Every year the state runs a surplus and then says this is fun money let’s spend it.  Now Arkansas is collecting record levels of tax revenue which means the surplus will be even greater. State politicians never agree to consider how to cut wasteful or low priority spending and instead look to taxes. The state wants to keep taxes high while spending hundreds of millions of dollars to pick winners and losers in business through economic incentives at a time when studies are showing these giveaways are a poor use of your money.
   
   
2. To get you to buy into their sales pitch, the Commission says it will also use the meetings to listen to your ideas about where highway money can best be used. Why  does it take a tax proposal before they listen?
   
   
3. The same officials who say they want to listen to your highway needs is the same officials who gave $1 million of your highway funds to the University of Arkansas to build a building.  Wonder how many potholes $1 million would have filled if they hadn’t given the money away.
   
   
4. Expect the Commission to come up with a list of highway projects in order to help sell the tax in certain areas of the state. Such a list might be useful if Issue #1 was about a temporary tax for specific projects, but it is permanent tax and you do not know how the tax will be spent ten, twenty, fifty years in the future. The list will be nothing more than a sales ploy.
   
   
5. Expect local officials to endorse the tax.  When have you ever seen a local official oppose any state tax that would give them a cut of the proceeds?
   
   
6. Expect state legislators, who have no opponents for reelection to endorse the tax claiming, “I am conservative but … we need the tax.” Getting on the Governor’s bandwagon to support the tax is easy for a legislator when the legislator has no opponent or only a weak opponent. Why? Because a legislator with no significant opponent for reelection won’t face a voter backlash.
   
   
7. If you vote for Issue #1 you are giving up the tax relief you were promised when a temporary tax was approved for specific projects.  The state sales tax is scheduled to go down by one half percent (0.50%) in 2023 when debts are paid off.
   
   
8. Arkansas has one of the highest sales taxes in the nation. According to the Tax Foundation, Arkansas’ sales tax rate is the 9th highest in the nation and when they compared the combined state/ local sales tax rates, Arkansas has the 3rd highest combined state/ local rate in the country. Issue # 1 keeps the Arkansas’ sales tax high – one of the worst in the nation.
   
   
9. Just last year Arkansas increased your taxes for highways.  The tax on gasoline and diesel fuel was increased and the registration fee on hybrid and electric cars was increased.
   
   
10. If you pass Issue #1 it will be nearly impossible to repeal the tax because the tax is being put into the Arkansas Constitution.

[i] Hot Springs to host regional highway meet, The Sentinel-Record, 01/08/2020