LITTLE ROCK – The Arkansas Highway has held four events around the state to commemorate the 31 projects paid for with a half-cent sales tax approved by voters 10 years ago.
In 2012 Arkansas voters approved the sales tax increase and since then it has generated about $1.8 billion in revenue, which has paid for improvements to about 200 miles of highway.
The projects are collectively called the Connecting Arkansas Program, or CAP, and they represent one of the largest highway programs in the history of the state.
In 2011 the legislature voted to place the sales tax measure on the 2012 ballot, and it was approved in a statewide election by 58 percent of Arkansas voters.
In 2019 the legislature referred to the ballot a proposal to make the half-cent for highways permanent. It had been scheduled to expire in 2023, after being in effect for 10 years. In 2020 Arkansas voters approved the proposal, with 55 percent of voters in favor of making the half-cent sales tax permanent.
Approval of a sales tax as a funding source for highway programs was an important milestone. Historically, the major source of revenue for road improvements had been the motor fuels tax, which is paid by motorists at the gas pump.
The state motor fuels tax on gasoline is 24.5 cents per gallon, and for diesel it’s 28.5 cents a gallon.
With motor fuels taxes as the foundation of highway funding, the problem for highway officials is that revenue has been steadily declining even as costs of construction goes up. For one thing, cars and trucks are much more fuel efficient nowadays.
Typically, to build a new interstate costs $9.4 million to $14 million per mile. A rural two-line highway costs $4 million a mile.
For example, 30 years ago a typical sedan used 30 gallons to drive 400 miles, and today a sedan is capable of going 400 miles on just 15 gallons. In other words, that typical family sedan now pays half in motor fuels taxes what it did 30 years ago.
Sales tax revenue increases with inflation. If the price of a candy bar goes from one dollar to two dollars, the sales tax collected by the state is doubled. However, even when inflation raises the price of a tank of gas, the state Transportation Department does not collect more in motor fuels taxes.
It doesn’t matter if it costs $3 a gallon or $4 a gallon, if you buy 10 gallons of gas the state will collect 24.5 cents a gallon, or $2.45 for each 10 gallons of gasoline you buy.
The federal government also collects a motor fuels tax, in addition to the state taxes. They are 15.44 cents a gallon for gas and 21.44 cents per gallon of diesel. Arkansas has been getting on average about $780 million a year in federal highway grants.
Arkansas has 16,454 miles of state highway, built and maintained by the state Transportation Department. We are the 12th largest state highway system in the country. Also, there are 65,553 miles of county roads and 17,240 miles of city streets in Arkansas.
The state maintains 7,356 bridges. Counties maintain 4,267 bridges and cities maintain 1.096 bridges.
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