LITTLE ROCK — Several members of the Governor’s Working Group on Highway Funding voiced interest Thursday in recommending a fuel-tax increase to help fund highway needs, though one member said the idea is not politically feasible.

LITTLE ROCK — Several members of the Governor’s Working Group on Highway Funding voiced interest Thursday in recommending a fuel-tax increase to help fund highway needs, though one member said the idea is not politically feasible.


Craig Douglass, executive director of the Arkansas Good Roads Foundation, said he would support increasing the state’s gasoline and diesel taxes by 10 cents per gallon.


"For significant revenue that would net the (Arkansas State Highway and Transportation) Department $110 million to $125 million quickly in order to match federal funds, in order to get them, in order to reinstate the critical overlay program, which impacts jobs in Arkansas and also extends the usable life of the existing highways, reducing our long-term costs on maintenance and construction, motor-fuel tax is what we believe we have to look at," he said.


The working group has been meeting since June and has until Dec. 15 to present recommendations to Gov. Asa Hutchinson. In addition to a short-term need for matching funds to obtain federal dollars for highway projects, state highway officials have identified $20.4 billion in needs over the next decade, with only $3.6 billion in revenue for highways expected in that time.


Douglass said 10 to 12 other states have passed recent fuel-tax increases successfully. With gas prices dropping, the timing for an increase is right, he said.


"Politically, it probably would be real smart to do it and do it real quick, but the important thing is that as gas prices continue to fall, that the motorist would be impacted less now than he or she would be later," he said.


State Highway Commissioner Frank Scott Jr. said he would favor raising the fuel tax by 15 cents and phasing in the increase 5 cents per year over three years. He also said he favors indexing the rate to inflation and charging motorists for "reportable miles traveled."


Arkansas State Chamber of Commerce President and CEO Randy Zook suggested raising the tax by 3 to 5 cents initially and then raising it by another 1 cent every three or six years for a set period of time. That would give other states time to follow Arkansas’ example, he said.


"Everybody is looking for opportunities to move fuel-tax collections and fuel-tax rates, but everybody is loathe to be the first to take the plunge," he said.


State Rep. Andy Davis, R-Little Rock, reminded the group that Hutchinson has asked it to keep in mind political realities.


"The idea of a tax increase is politically infeasible," he said.


Davis suggested several "revenue-neutral" alternatives, including directing some general revenue to highways, providing a sales tax rebate to the Highway Department for construction materials, directing some surplus funds to highways, and increasing the sales tax on road-related items while cutting income taxes to offset the increase.


Arkansas Truckers Association President Shannon Newton said she did not want to take a tax increase off the table and said of Davis’ suggestions, "My concern is that it’s not long-term."


State Sen. Bill Sample, R-Hot Springs, said that with new tax cuts set to take place next year, he was not sure the state could afford to cut income taxes further. He also said, "I don’t really care for short-term ideas."


State Department of Finance and Administration Director Larry Walther said the Legislature approved $50 million in tax cuts that took effect this year and an additional $100 million that will take effect next January.


"It would be nice to have an off-setting income tax decrease so that we could have a revenue-neutral approach. I think that’s got a much higher … probability of passing the Legislature," Walther said.


Duncan Baird, the working group’s chairman, said he would arrange to have a list of possible recommendations in writing for the next meeting. He told reporters the panel likely would give the governor a variety of options to choose from.