Arkansas Giving Truckers Unintended Tax Break = Less Money for Highways

[Grzrd]

The intent was for a diesel tax increase to basically be matched by a sales tax decrease. The diesel tax increase never occurred, but the sales tax exemption remains.  Net result: twelve million dollar loss for Arkansas roads over next four-year planning cycle:

The failure by the legislature to repeal the not-yet-implemented sales tax exemption for large trucks and trailers during the 2012 fiscal session will mean $4 million less per year for the state‟s highways, county roads, and city streets, according to Arkansas Highway Commission Chairman Madison Murphy and State Highway and Transportation (AHTD) Director Scott Bennett. The well-chronicled exemption was envisioned as a "quid pro quo‟ for a five-cent per gallon increase in the state‟s diesel tax that never materialized. Both the exemption and the diesel tax increase were proposed by the trucking industry.
"We‟re already operating under a systemically flawed and inadequate system for funding our highways, and now the State is going to lose an additional $4 million in revenue every year ....

[US71]

The state legislature is predominantly Republican and keeps trying to cut taxes...except on groceries (and only because a Democratic governor cut the grocery tax)

[M86]

The intent was for a diesel tax increase to basically be matched by a sales tax decrease. The diesel tax increase never occurred, but the sales tax exemption remains.  Net result: twelve million dollar loss for Arkansas roads over next four-year planning cycle:

Sigh... Gotta love Arkansas.  I try to keep my mouth shut, but it's hard.  Absolutely ridiculous.  And as US71 said, it's Republicans.  Enough said.

[mcdonaat]

Guessing the small highways will have to be sacrificed before anything else. AR 129 and AR 133 are the two worst, in my mind, and I use em frequently when I pick up lotto tickets across the state line.

[US71]

Guessing the small highways will have to be sacrificed before anything else. AR 129 and AR 133 are the two worst, in my mind, and I use em frequently when I pick up lotto tickets across the state line.

I just got back from Batesville, AR: I-40 is in really bad shape, yet there is money to add what appears to be extra lanes around Conway. There are random sections that have been patched, but overall, it's in bad shape.

[SP Cook]

The state legislature is predominantly Republican

Arkansas Senate: 20 D, 15 R.  http://www.arkansas.gov/senate/senators.html

Arkansas House: 55 D, 45 R.  http://www.arkansashouse.org/members

[Grzrd]

The intent was for a diesel tax increase to basically be matched by a sales tax decrease. The diesel tax increase never occurred, but the sales tax exemption remains.  Net result: twelve million dollar loss for Arkansas roads over next four-year planning cycle

This TV video report indicates that the tax break went into effect on July 1:

With the start of the new fiscal year, the Arkansas trucking industry will get a break on taxes levied on new vehicle purchases.
The tax break that will cost the state $4 million per year takes effect Sunday, but how the reduction came about has left some lingering bad feeling at the Capitol.
The tax cut was designed to partly offset a proposed increase in the diesel fuel tax that never won approval.
Gov. Mike Beebe says it was wrong for the tax cut to go into effect. The Senate blocked a House effort during the 2012 fiscal session to delay imposition of the tax for one year.
State Sen. Paul Bookout, D-Jonesboro says he hopes to see the issue surface again in the regular session that starts in January.

This should fire up the voters to vote for the sales tax increase in November ... 

[Road Hog]

The state legislature is predominantly Republican

Arkansas Senate: 20 D, 15 R.  http://www.arkansas.gov/senate/senators.html

Arkansas House: 55 D, 45 R.  http://www.arkansashouse.org/members

DING. But just wait for 2020 when the Great White Northwest prevails. :

[vdeane]

The intent was for a diesel tax increase to basically be matched by a sales tax decrease. The diesel tax increase never occurred, but the sales tax exemption remains.  Net result: twelve million dollar loss for Arkansas roads over next four-year planning cycle:

The failure by the legislature to repeal the not-yet-implemented sales tax exemption for large trucks and trailers during the 2012 fiscal session will mean $4 million less per year for the state‟s highways, county roads, and city streets, according to Arkansas Highway Commission Chairman Madison Murphy and State Highway and Transportation (AHTD) Director Scott Bennett. The well-chronicled exemption was envisioned as a "quid pro quo‟ for a five-cent per gallon increase in the state‟s diesel tax that never materialized. Both the exemption and the diesel tax increase were proposed by the trucking industry.
"We‟re already operating under a systemically flawed and inadequate system for funding our highways, and now the State is going to lose an additional $4 million in revenue every year ....

That was probably intentional.  Stuff like that is a good way to win approval for tax cuts when it's not financially feasible to do so.

[msunat97]

There was a deal in place that didn't happen & the politicians were afraid to raise taxes (as per the deal) in an election year.  Makes you wonder if a group will ever do a deal with the State House ever again.