Public Support for Infrastructure Financing: The Arkansas Bond Referendum Experience.

• Author: Huckabee, Mike
• Position: Statistical Data Included

Arkansas voters recently passed the first highway bond package in that state in 50 years. Less than four years earlier, 87 percent of voters had rejected another highway funding package. This article highlights the strategic plan followed by state leaders to pass a much-needed GARVEE bond package in an anti-bond environment.

In January 1996, Arkansas voters went to the polls and sent a message to every politician and finance officer in the state. Then-Governor Jim Guy Tucker had put on the ballot the most sweeping highway construction program in Arkansas history. To pay for the $3.5 billion program, voters were being asked to impose a gasoline tax increase, a diesel fuel tax increase, and an increase in the state sales tax. Serving as lieutenant governor at the time, I opposed the plan for several reasons.

* Concern that the roads would not last as long as it took to pay off the long-term bonds being proposed.

* Concern that for the first time in Arkansas history, the state would be using general revenues in the form of the sales tax increase to pay for highway construction. The bulk of general revenues in Arkansas go toward public education, and public school officials were concerned about setting this precedent.

* Concern about the size of the proposed tax increases.

* Concern that almost all of the construction was on non-Interstate highways. The greatest need for reconstruction was on the Interstate system, which was crumbling. The highway construction program would have rehabilitated less than 20 miles of that system.

Arkansas voters have historically been wary of bond issues. They had not approved one for highway construction in half a century. But the margin of defeat in that January 1996 special election was surprising. Eighty-seven percent of voters rejected the proposal. Consider that this had been the major initiative of a governor who had been elected to a four-year term in November 1994 with 60 percent of the vote. Consider that the plan had been ratified by a majority of members of the state House of Representatives and the state Senate. Consider that the proposal had the endorsement of chambers of commerce across the state and most of the so-called power structure. Then consider that it received only 13 percent of the vote. It was obvious that Arkansans believed they were nor a part of the process, and that this was something the power structure was trying to force down their throats, and they resented it.

Facing health and legal troubles, Governor Tucker announced he would resign as governor by July 15, 1996. As lieutenant governor, I would assume the governorship upon his resignation. It was clear that if our Interstate highway system was nor overhauled, economic development in Arkansas would suffer I felt that if the issue were presented correctly, Arkansas voters would approve a bond issue for that work. Many political advisers considered that naive. Indeed, the previous road-construction proposal had left such a bad taste in voters' mouths that it might be years before they would consider a new proposal. The atmosphere was so poisoned that no serious attempt at a road construction program was made during the 1997 legislative session.

Beginning the Process

In 1952, in the wake of road-building scandals in the governor's...