We saw this question on Facebook:
Will the road tax be diverted to something else because of the COVID-19 pandemic and budget crisis?
The question appears to refer to the proposed one-half percent (0.50%) sales tax dedicated for highways and roads. The proposal will appear on the ballot in November.
In 2019, politicians decided road construction was a top priority. Circumstances have changed significantly from then. Now people are more concerned about surviving the pandemic and about essential services remaining open.
To answer the question, it is too late for the legislature to change its proposal. If the tax passes in November, which looks unlikely, the tax revenue must go to highways and roads only. The proposal amends the Arkansas constitution and the legislature can only draft such proposals in a regular session, which occurs in odd numbered years.
If passed, this tax can’t be changed or repealed, except by another amendment to the constitution. The earliest date such an amendment could be voted on is November 2022.
The tax revenue couldn’t help with the immediate budget crisis in Arkansas in any event because the proposed tax is not scheduled to go into effect until after the expiration of an existing sale tax to pay off highway debt. The existing tax was expected to be paid off sometime in 2023.
Putting a permanent sales tax in the constitution was a bad idea to begin with. The lack of flexibility to repeal the tax or to divert the revenue to greater needs demonstrates why a tax should not be put in the Arkansas constitution.
This amendment to the constitution was proposed not because it was the only way to propose a tax to take effect after the existing tax expires. It was done for political considerations – to get more legislators to vote for it. Passing a tax for highways and roads was unpopular, but more legislators would vote for it if the tax was referred to a vote of the people.
If you have been wondering what taxes, now dedicated for a specific use, can be diverted to critical needs in the short run – this proposed tax is not it.
The measure should be removed from the ballot. Surely the legislature can accomplish this.
Times have changed.
A better solution for funding our roads would be to repeal the sales tax exemptions for billboard and radio advertising and earmark those funds for Ardot. End the free ride that these special interests have been getting for decades and make them start pulling the wagon !