Week In Review

State Capitol Week in Review

            LITTLE ROCK – The largest highway construction program in state history got off to a good start when the Highway Commission opened bids for a $52.7 million project in northwest Arkansas.

            The project is the next phase in the Bella Vista bypass.  It will relieve congestion in that city and eventually become part of the route of Interstate 49 between Canada and New Orleans.  It’s the first project in the Connecting Arkansas Program (CAP), which will be paid with revenue from a half cent sales tax collected for 10 years. 

The tax was approved by voters in a 2012 state election.  It will finance an investment of $1.8 billion in 31 separate highway construction projects extending 180 miles.  Those projects will be concentrated in 19 heavily traveled corridors.

A new Internet web site tracks the progress of the CAP projects.  It has various maps and it will update information about lane closures in construction zones.

It is at ConnectingArkansasProgram.com

You also can access the web site through IDriveArkansas.com

The half cent sales tax for highways generated almost $13.3 million in January, which is 4.4 percent below forecasts. At the Highway Commission meeting, a finance officer reported that February revenue also was on pace to come in below estimates.

Initial estimates were for the half cent sales tax to generate $160 million a year for the state Highway and Transportation Department and $35 million a year for counties and cities.  That represents the traditional division of highway revenue in Arkansas, under which the state receives 70 percent, counties get 15 percent and cities get 15 percent.

The constitutional amendment approved by voters last year also created a permanent fund for city street projects, similar to the aid for counties fund. The city street aid fund is replenished with revenue from one cent of existing motor fuels taxes collected on sales of gasoline. It will generate about $20 million a year. Cities apply for funding from that account and must put up 10 percent of the cost of a project. The state aid fund will match it with 90 percent.

Act 1032 of 2011 creates a committee of nine mayors to determine how money from the state aid fund is to be distributed.  The mayors are appointed by the governor, the Speaker of the House and the President Pro Tem of the Senate, each of whom must appoint at least one mayor from a city of more than 25,000 residents.

Tourism Tax Revenue

The state tourism tax is a 2 percent sales tax on items related to tourism, such as hotel rooms and boat rentals.  In 2013 the tax generated $12.7 million, a record.  That money will pay for advertising and promotions of Arkansas as a tourist destination.

Arkansas tourism is rebounding after a national economic slump in 2009 had a negative effect on tourist destinations in every state.  In 2009 the state tourism tax generated $11.3 million.

Tourism officials reported that 103,400 people worked in the leisure and hospitality businesses in Arkansas in December.  The economic impact of tourism in Arkansas is an estimated $5.7 billion a year.