LITTLE ROCK, Ark. (AP) Facing a drop in fuel consumption and tax revenue, Arkansas’ highways need $200 million more annually just to maintain current conditions, the state’s highways chief said May 21.
Speaking to the first meeting of a panel studying the state’s highway financing, state Highway and Transportation Director Dan Flowers said the state needs $23.7 billion over the next decade for road improvements. But Flowers said his department is only projected to receive $4 billion in revenue over that same period.
“Things are going to have to change in the future,’’ Flowers told members of the Arkansas Blue Ribbon Committee on Highway Finance.
The 19-member panel was formed by lawmakers earlier this year to look at new ways to fund Arkansas’ highways. The committee must come up with recommendations and proposed legislation by July 1, 2010.
Flowers said that one of the main ways of paying for road improvements, the motor vehicle fuel tax, has been a flat source of revenue and that the state is seeing some decline in that stream. Fuel consumption is down 2.7 percent this fiscal year compared to last year and motor fuel tax revenue is down 3.3 percent during that same period, he said.
Overall, the state has seen a 1.5 percent drop in highway revenue, Flowers said.
Flowers said he knows that it’s not possible to find revenue to pay for all of the nearly $20 billion in needs that won’t be funded over the next decade.
Madison Murphy, a member of the highway commission and a member of the finance panel, said that the committee needs to come up with realistic ways to fund improvements to the state roads.
“We have a hole to dig out of prior to making progress,’’ Murphy said.
The highway department has gotten some relief from an increase in the state severance tax on natural gas approved last year and through $351.5 million the state will receive for highways through the federal stimulus package.
Committee members said the panel will have to overcome a perception that the stimulus money will solve all of the state’s highway needs.
“It’s wonderful and we appreciate it, but it’s not the answer,’’ Mark Lamberth, a member of the panel, said. “We’re not talking millions. We’re talking billions.’’