LITTLE ROCK — An Arkansas House panel endorsed a proposal Tuesday to raise fuel taxes for the first time in 20 years and tap into expected casino revenue to increase funding for state highways.
The House Revenue and Tax Committee approved the proposal, a key part of a highway funding plan Gov. Asa Hutchinson and legislative leaders unveiled earlier this month. The proposal, which passed the Senate last week, now heads to the House for a vote.
The proposal is estimated to raise $95 million for Arkansas' highways. A second part of the highway funding plan would ask voters next year to permanently extend a half-cent sales tax for highways. Highway officials have said they need another $478 million a year to maintain and improve the state's roads.
"We can't continue to shove our infrastructure problems in the corner and pretend they don't exist," Republican Rep. Mike Holcomb, the bill's sponsor, told the committee.
The bill approved Tuesday would impose a new wholesale tax on fuel that would raise gas prices by 3 cents a gallon and diesel by 6 cents. The measure also commits at least $35 million in expected tax revenue from four casinos voters approved through an expanded gambling initiative last year.
The bill has drawn opposition from lawmakers who say they're concerned about the state committing other funds to make up the difference until the casino revenue comes in at $35 million.
"If we have a downturn in the economy or we have a big shortfall, we're going to have to cut somewhere and you're going to have that funding ahead of higher ed, pre-k, and all these other services," said Republican Rep. Les Eaves, who said he plans to vote against the measure on the House floor.
The proposal also imposes an additional registration fee of $100 on hybrid vehicles and $200 on electric vehicles. Supporters say the additional fees are needed because hybrid and electric drivers aren't paying as much in fuel taxes that the state relies on for road upkeep. Several hybrid and electric vehicle owners told the committee they believed the proposed fees were excessive and unfair.