The Arkansas Department of Transportation suffered a setback on Thursday, when the Arkansas Supreme Court ruled that it could not use funding raised through a statewide 0.5 percent sales tax earmarked for four-lane highway construction for projects larger than four lanes.
This decision will likely have an impact on construction efforts on Interstate 30 and Interstate 630 in Little Rock.
A group of four plaintiffs – Shelly Buonauito, Mary Weeks, Verlon Abrams and Sarah B. Thompson – filed a lawsuit to block construction projects on Interstate 30 and Interstate 630 in Little Rock. The plaintiffs filed an illegal-exaction lawsuit to stop the expenditure of highway sales tax funding for the Interstate 30 and Interstate 630 projects and to restore the funds used to the Arkansas Four-Lane Highway Construction and Improvement Bond Account.
According to the Supreme Court ruling, an illegal exaction is an “imposition of a tax or the expenditure of public funds that is not authorized or which is contrary to law.” The plaintiffs argued that the interstate projects do not constitute “four-lane highway improvements” as specified by Amendment 91.
Arkansas voters approved a 0.5 percent temporary sales tax designed to improve and maintain the state’s four-lane highway system, county roads and city streets. The amendment authorized “general obligation highway construction and improvement bonds for the state’s four-lane highway system.”
Under Amendment 91, the Arkansas State Highway Commission is allowed to issue Four-Lane Highway Construction and General Obligation Bonds that cannot exceed $1.3 billion. These bonds were intended for “accelerating highway improvements in progress or scheduled as of Jan. 1, 2011 and “funding new four-lane highway improvements not in progress or scheduled as of Jan. 1, 2011,” as well as providing matching funds for federal highway programs for four-lane highway improvements and paying the costs of bond issuance.
The highway tax was authorized by the passage of Issue 1 in the 2012 general election. This ballot measure, one of three constitutional amendments the Arkansas General Assembly referred to voters in 2011, became Amendment 91 of the Arkansas State Constitution.
In the court’s majority decision, Arkansas Supreme Court Associate Justice Josephine Linker Hart cited more than 30 instances of the use of the phrase “four-lane highway” and noted there was no reference to six-lane interstates in the text.
“The repeated reference to “four-lane highways” and the lack of a specific reference to six-lane interstate highways means the Amendment 91 funds cannot be used for the latter. Certainly, if the General Assembly intended that the tax imposed by Amendment 91 be used for major improvements to six-lane interstate highways, such as projects CA0602 and CA0608, the drafters could have expressly so stated,” Hart wrote.
An earlier Pulaski County Circuit Court ruling dismissed the lawsuit filed by the plaintiffs, and the state Supreme Court justices reversed and remanded this decision.
Currently, there is a ballot issue for the 2020 election, also entitled Issue 1, that would make the 0.5 percent sales tax permanent. The sales tax is set to expire in 2023.