New Revenue Subcommittee of the Arkansas Blue Ribbon Committee on Highway Finance – September 16, 2009
Posted on September 16th, 2009
Date & Time: Wednesday, September 16, 2009 at 10:00 AM
Location: Room 272, State Capitol
Committee Information:Members on Committee
Agenda: http://www.arkleg.state.ar.us/assembly/2009/Lists/Meetings/Attachments/12149/I7791.pdf
Attachments: none
The Arkansas Legislative website and network is down, so I am not live blogging this meeting. I kept a running log during the committee and this was posted after I was able to get back to an internet connection.
10:05 am – The meeting was called to order by Jim Mckenzie, the subcommittee chairman
10:07 am – Mr. Bill Lynch said that we need to look at all options but that we should take a closer look at some of the public private funding methods than have we had in the past.
10:10 am – Rep. Bill Sample. – Agreed but thinks that we need to be aware that we need a serious funding source and seems to believe that we are going to need a serious tax that matches the “need” and that a public-private option will not get us there.
10:12 am – Mr. Williams F. “Bill” Fletcher suggested focusing on smaller sections where bottlenecks are occurring.
10:14 am – Mr. Mark Lamberth suggested a phase-in of a sales tax on fuel, tires, and batteries. He believe that the people are ready for this problem needs to be solved. He says that there are a lot of thinks in the “Discussion Paper” that can work, but none of them will work by themselves.
10:18 am – Mr Mark McBryde says we can’t do this in one fell swoop because the public would not stand for it. [In other words, the heat needs to be turned up slowly on the frog you are cooking so he won't jump out.]
10:19 am – Rep. Sample expressed concerns about working toward a tax when he is running for office.
10:20 am – Mike Wilson said that nobody ever got beat voting for taxes for highways or education.
10:22 am – Chairman stated that the need is $200 million on the low end; $14 billion on the high end.
10:24 am – Mr. David Malone says that we are kidding ourselves if we think that $200 million will solve the problems. He said this will require a combination of funding sources. He seriously doubts that the legislature is going to go for the high end funding. He suggest that funding be broken down in a way to say this amount of funding is necessary for maintenance, this amount for solving congestion problems, and this amount is the amount needed for economic development. [The problem is that the money will not actually be distributed according to those priorities by the Highway Commission and the legislature has no way to approve funding according to the priorities as described by Mr. Malone.]
10:34 am – There was a back and forth discussion about the inequity of distribution of discretionary funds on the willingness of legislators and the public to fund the needs. Mr. Mark Lamberth and I participating in said discussion. I pointed out that something that resolves the problem of the scope of the committee conflicting with the need to find a fair and sufficient funding source would be to rely upon the regional mobility authorities.
10:37 am – Mr. Mark McBride suggested the creation of a funding model for objectively determining priorities.
10:41 am – Mr. Sean Slone, Transportation Policy Analyst for the Council of State Governments (a rather liberal group in spite of claims of non-partisanship) is discussing the elasticity of highway revenue.
10:43 am – He discusses moving from an excise tax to an ad valorem. Another method is indexing the tax to a particular indicator. He suggested the CCI (which is the Construction Cost Index)
10:45 am – He is discussing the public support for these issues and claims that the desire is that the voters not get hit all at one or all in one particular place. Mr. Sloan will be presenting a more complete report at the committee this afternoon.
10:47 am – Mr. Mike Wilson asked if any state had implemented an indexed ad valorem with bracketed high and low value limits.
10:49 am – Mr. Bill Fletcher is asking about the CCI and the potential for this to artificially be driven high to maximize revenue, thereby creating criticism for the proposal.
10:51 am – Chairman Jim McKenzie is discussing index programs in other states, he mentions that there may be problems with that which was tried in Michigan.
10:53 am – Mr Lynch is asking if anyone has moved completely from an excise (absolute tax per gallon) to an ad valorem. (percentage of tax per dollar).
10:54 am – Mr. Mike Wilson is asking for a graph that shows a comparison of excise versus ad valorem.
10:55 am – Mr. Mark Lamberth is asking Mr. Sloan why the Michigan system did not work. Mr. Fletcher mentions that we should imagine what would have happened if the tax had been tagged when gas was $4/gal like we had a year ago. Mr. Lamberth says that he thinks a combination of the excise and ad valorem taxes are the way to go.
10:58 am – [I am wondering why there are never any opposing viewpoints placed on these type of committees. The discussion is all one sided and short sighted without any critical reasoning taking place. It seems to be the same kind of decision made in an echo chamber that caused the Fayetteville School Funding Millage increase to go down in brutal defeat.]
11:00 am – The state motor fuel tax rates for surrounding states indicates that Arkansas has the highest rates of any of the surrounding states. Arkansas is the highest in Gasoline, Diesel, and Gasahol. More information later.
11:03 am – The chairman is suggesting a “Carbon Tax” may be the way to go and he believes that it will not be necessary obtain the 75% super majority required to raise that tax.
11:05 am – He also suggested fees, but Mr. Wilson said that they are probably more a nuisance than a revenue source. Also suggested is a miles-traveled tax. Mr. Lynch thinks that is the most intriguing. Most seem to think that is something for the future. [You have to be kidding me, these guys are debating taxes for the future before they have even decide on this one.]
11:08 am – Mr. Malone suggested a 1% sales tax increase on everything.
11:09 am – Mr. Charles Dains suggests a new sales tax on top of the regular sales tax.
11:11 am – The chairman suggested on a general income tax hike. Bill Sample pushed back and said he was not comfortable even discussing taxes that are not paid based upon use.
11:12 am – Mr. Bill Fletcher said that he believes all of the current sales taxes on automobiles should be redirected to highways. He is suggesting that they should suggest a combination of the mentioned taxes. [Frankly, I sure hope these guys make the suggestions that it sounds like they will. The voters will kill this whole deal dead, then perhaps this discussion can be held again with some critical voices who are concerned about protecting the taxpayers rather than scalping them for as much as they think they can dupe them into.]
11:16 am – Mr. Malone is again suggesting that they need to present funding sources that have not been considered before because of a super-majority vote requirement. He again mentions an income tax increase.
11:21 am – Much discussion around the table about what are the limits of their charge. It seems they have actually made no progress on actually determining a source of new revenue, they have pretty much declared by a motion determining the future activities of the committee to create a plan to raise ALL of the previously discussed taxes in a slow and distributed enough fashion so as to not anger a majority of the voters all at once. Mr. Lynch has suggested that the subcommittee break into subcommittees to each discuss a couple of tax proposals each. [I kid you not.]
11:28 am – Mr. Mark Lamberth believes that some of the Blue Ribbon Commission meetings should be held around the state to help generate interest.
11:29 am – Mr. Williams believes that we need to start running television commercials to “define” the problem even though we do not yet have the answer.
11:33 am – Committee Adjourned.
Filed under Uncategorized |
Comments are closed.
