Arkansas To Raise Diesel Tax 4 Cents
March 29, 1999
Thursday, Arkansas Gov. Mike Huckabee will sign a highway bill passed by the state Legislature that will raise the diesel tax by 2 cents immediately and 2 cents next year.
Along with a $575 million bond issue that will go to voters, this marks the first highway construction and repair program adopted in the state in nearly a decade. Together, they will pay for repairing more than 300 miles of interstates in poor condition, as well as pumping millions of dollars into noninterstate highway construction.
The trucking industry, while supporting the 4-cent tax increase, had hoped for a longer phase-in period. However, this was better than the Senate’s original bill, which had called for imposing the entire 4-cent increase immediately. The general feeling was that a diesel tax increase would be better than a weight distance tax or tolls on existing interstates, other proposals that had been considered by the state Legislature and the state Highway Commission.
Fuel taxes, which also includes a 3-cent-per-gallon gasoline tax to be phased in over the next three years, will be raised about $60.5 million a year when fully implemented. $14.4 million of that will go to help finance road bonds if voters approve the bond program. The rest of the money goes for road improvements – 70% to the state Highway and Transportation Department, and 15% each to the cities and counties.