Ark House Panel Backs Highway Bill To Increase Fuel Taxes And Fees

Feb 27, 2019

Arkansas House Committee on Revenue and Taxation advances SB336 for highway funding, the bill goes to the House for a vote.
Credit Courtesy: G. Hooks-Ark. Sierra Club

ARKANSAS HIGHWAY BILL –   Gov. Asa Hutchinson's  plan to raise $300 million a year for Arkansas Highways  was  advanced Tuesday as the Arkansas  House Revenue and Taxation Committee recommended  the  legislation.   Senate Bill 336 is split into two parts. The first part, makes permanent  an  extension of the half-cent sales tax on fuel, this is predicted to raise $205 million annually for the Arkansas Department of Transportation and  would require voter approval  on the 2020 general election ballot. 

The second  part  of the  bill  involves  an  increase on  new  tax  indexes  for diesel and gasoline,  as well as additional registration fees for hybrid and electric vehicles.  It also includes  collecting  tax revenues from casinos, restricted reserve funds and the use of other funding, to make up the remaining $95 million of the plan. This part of the plan just needs to be passed by the legislature.

Gov. Asa Hutchinson unveiled his highway funding plan in January, 2019.
Credit Courtesy: Ark Online

A criticism  of  the bill is the part  where  electric car owners  would  have to  pay annually  an  additional $200  to  register  their  vehicle, and  $100  annually  for  hybrid  vehicles.  Glen Hooks with Arkansas’  Sierra Club,  told the committee  that  extra  registration  fees wipe  out  any  fuel  savings and  would reduce the incentives for owning electric or hybrid cars.

Glen Hooks, director of Arkansas Sierra Club.
Credit Courtesy: G. Hooks-Ark. Sierra Club

"I think it’s worth noting that putting the electric vehicle fee at $200 a year will put Arkansas at the top of the list nationally, tied with two other states, when it comes to the highest fees in the entire country for electric vehicles," explained Hooks.

Hooks said other states waive or lower registration fees to owners of electric or hybrid vehicles to encourage their use.  But the committee passed the bill and it now heads to the House Floor for a vote.  If approved, it will head to the Governor’s desk for his signature.