Huckabee and the 1999 Arkansas fuel tax hike

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There's been a lot of arguing back and forth about former Arkansas Gov. Mike Huckabee's record on taxes and spending. The Club for Growth argues that Huckabee is not a fiscal conservative. Huckabee's allies accuse the Club for Growth of being deliberately misleading about Huckabee's record, although when they get down to specifics, what they are really arguing is that the facts that have been documented by the Club for Growth aren't important.

One of the factual points on which Huckabee has directly contradicted the Club for Growth is on the matter of the fuel tax increase he signed into law in 1999. Here's what the Club for Growth said in their analysis of Huckabee's fiscal record:

He signed bills raising taxes on gasoline (1999), cigarettes (2003) (Americans for Tax Reform 01/07/07), and a $5.25 per day bed-tax on private nursing home patients in 2001 (Arkansas New Bureau 03/01/01).

In response, Huckabee claims that while the fuel taxes went up, the increase was approved by 80% of the voters in a referendum. Club for Growth has a new video showing Huckabee saying something of that sort on five different occasions in recent interviews and debates.

The end of the video has the following response:

On April 1, 1999, Huckabee signed the gas and fuel tax hikes into law. The tax hikes began taking effect that day. -- Arkansas Democrat-Gazette, 04/25/99

On June 15, 1999, 80% of Arkansas voters approved a bond issue, which DID NOT include the gas tax increases. -- Arkansas Democrat- Gazette, 06/29/99

I don't have access to that newspaper's archives, but I was able to find records of the 1999 legislative session on the Arkansas Legislature's website. This link lists all the acts of 1999 -- bills that were enacted into law -- with links to PDFs of the legislation. This link provides summaries of all the acts of the 1999 session.

The two relevant acts were Act 1027 and Act 1028. Here are the summaries from that Legislature's website:

HIGHWAY BONDS

Act 1027 (HB1500) - The act authorizes the Arkansas State Highway Commission to issue revenue bonds not to exceed $575,000,000 for the purpose of constructing and renovating roads and highways. The act authorizes that the repayment of the bonds shall be guaranteed by the full faith and credit of the state and prescribes the terms and conditions of the issuance of such bonds. The act describes the sources of repayment of the bonds and provides for a statewide election on the question of issuing such bonds.

MOTOR AND DISTILLATE FUEL TAXES

Act 1028 (HB1548) - The act levies an additional excise tax on motor fuel in the amount of 1¢ per gallon per year for 3 years. The act also levies an additional excise tax on distillate special fuel in the amount of 2¢ per gallon on the effective date of the act and provides that the tax on distillate special fuel will increase to 4¢ per gallon effective one year after the effective date of the act. The act also provides that the additional taxes collected pursuant to the act shall be special revenues and shall be distributed as set forth in the Arkansas Highway Revenue Distribution Law. The act also eliminates the current limitation on the transfer of funds to the State Aid Road Fund.

These two bills were passed by the Arkansas Legislature and signed into law by Gov. Huckabee. Note that the only reference to an election is in Act 1027, which is about the issuance of revenue bonds. There is no election mentioned in Act 1028; unlike Oklahoma, politicians in Arkansas can enact a tax without a vote of the people.

Just to be sure, let's drill down into the actual text of the bills:

Here's Act 1027, the Arkansas Highway Financing Act of 1999. The bill calls for the issuance of bonds, to be guaranteed by the full faith and credit of the state, to be repaid by anticipated federal highway funds and the increased excise tax on "distillate special fuels" (e.g. diesel):

Revenues derived from the increase in taxes levied on distillate special fuels pursuant to Section 2 of the "Arkansas Distillate Special Fuel Excise Tax Act of 1999" and the "Motor Fuel Excise Tax Act of 1999" and transferred to the State Highway and Transportation Department Fund pursuant to Arkansas Code 27-70-207(c) in accordance with Section 4(a) of the "Arkansas Distillate Special Fuel Excise Tax Act of 1999" and the "Motor Fuel Excise Tax Act of 1999".

Section 5 of the Act calls for an election:

No bonds shall be issued under this Act unless the issuance of bonds has been approved by a majority of the qualified electors of the state voting on the question at a state-wide election called by proclamation of the Governor.

So Act 1027 called for an election to ask the voters of Arkansas whether or not to issue revenue bonds for highway projects.

Now let's look at Act 1028, which is given two names in Section 1:

This Act may be referred to and cited as the "Arkansas Distillate Special Fuel Excise Tax Act of 1999" and the "Motor Fuel Excise Tax Act of 1999".

Here are the key paragraphs, sections 2(a) and 3(a):

On and after the effective date of this act, in addition to the taxes levied on distillate special fuels in this section and Arkansas Code 26-56-502 and Arkansas Code 26-56-601, there is hereby levied an excise tax of two cents (2¢) per gallon upon all distillate special fuels subject to the taxes levied in those code sections. Effective one (1) year after the effective date of this act, the additional tax levied by this subsection shall be increased by an additional two cents (2¢) per gallon....

On and after July 1, 1999, in addition to the taxes levied on motor fuel in 26-55-205, 26-55-1002 and 26-55-1201, there is hereby levied an additional excise tax of one cent (1¢) per gallon upon all motor fuels subject to the taxes levied in those code sections. On and after July 1, 2000, the additional tax levied by this subsection shall be increased to two cents (2¢) per gallon. On and after July 1, 2001, the additional tax levied by this subsection shall be increased to three cents (3¢) per gallon.

Note that the tax isn't contingent on voter approval. The act, approved by the legislature and signed into law by Governor Mike Huckabee, directly increases the taxes at the pump on diesel and gasoline. Here is the only mention of voter approval in Act 1028. It's at the beginning of section 4:

(a) The additional taxes collected pursuant to this act shall be considered special revenues and shall be distributed as set forth in the Arkansas Highway Revenue Distribution Law, beginning at Arkansas Code § 27-70-201.

(b) However, if the bond issue provided in the Arkansas Highway Financing Act of 1999 is approved by the voters, the distillate special fuel taxes collected pursuant to Section 2 of this act shall be distributed as provided in the Arkansas Highway Financing Act of 1999.

The only thing voter approval changed is how the additional tax revenues would be allocated. The tax increase would go into effect either way.

Bottom line: Club for Growth is telling the truth about Huckabee's gasoline and diesel tax hike. Huckabee's recent statements about the tax increase are at least misleading -- when he mentions the tax increase and then says that Arkansas voters approved "a road program," giving the impression that the tax increase and the "road program" (meaning the bond issue) were one and the same thing -- and at worst a flat-out lie -- when he says that Arkansas voters approved the tax increase.

BONUS VIDEO: Here's Huckabee, at the opening of the 2003 special legislative session, telling legislators he'd be fine with any tax increase they'd choose to pass:

There's more interesting stuff about Huckabee's fiscal record and lack of support from Arkansas Republican legislators on the Arkansas Journal blog.

AND MORE: The latest counteroffensive from Huckabee's blogpals is on Evangelical Outpost, where Joe Carter accuses Club for Growth of hypocrisy for not including a 2005 earmark that benefitted a company owned by Club for Growth.net donor and chairman Jackson Stephens Jr. in one of the CfG's congressional RePORK Cards. I replied in the comments:

Joe, the Club for Growth issued its first RePORK card in 2006, based on 19 anti-pork amendments offered by Rep. Jeff Flake; the earmark to which you refer was in 2005. And even if they'd had a RePORK card in 2005, the earmark wouldn't have been on the RePORK card unless someone like Jeff Flake or Tom Coburn had proposed an amendment to bar funding for it, unlikely considering that it was for a "Surgical Wound Disinfection and Biological Agents Decontamination Project" for the DOD.

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3 Comments

Jamison said:

When Huckabee became governor, there were only 4 (out of 35) Republican senators, and 11 (out of 100) Republican State Reps. For Mike Huckabee to still cut taxes 93 times, and only raise them thrice, is astounding. Wouldn't you agree? With that many Democrats, it doesn't matter how many times you veto taxes and/or spending, it'll pass anyway.

About the spending: excluding federal pass-throughs and programs strictly controlled by the HEAVILY Democratic legislature, spending rose only about six-tenths of 1 percent a year during his 10 1/2-year tenure.

As for the 20 percent growth in state employees, Huckabee says he had no control over higher education and federally funded positions, "and when you remove those employees, the number of state employees increased 5.6 percent." That doesn't even take into account the population growth during his 10 years as governor.

B. Payne said:

It's true that HB 1548 increased fuel taxes without voter approval, while HB 1500 asked for voters approving bonds to pay for the road program. Thus, it's looks like Huck is lying when he says the people approved the fuel tax increase.

HOWEVER, HB 1501, section three says:
"The taxes levied by this act shall not become effective until after a majority of the qualified electors of the state voting on the question approve the issuance of State of Arkansas Federal Highway Grant Anticipation Revenue Bonds as provided by the Arkansas Highway Financing Act of 1999."

I'm not sure if HB 1501 became law, but if it did, then Huck would be right that certain fuel taxes never went into effect until the voters approved them. Thus, even Huck's boldest declarations on the matter would be accurate.

Even if HB 1501 were not law and only 1500 and 1548 pertained to the tax and road program, one could reasonably construe support for the bond as support for the tax, just as one could construe a vote against Gov. Schwarzenegger's referenda in 2004 as vote against the governor. It's a stretch, sure, but it's interpretation as opposed to a lie.

HB 1501 was "withdrawn by the author" on April 9, 1999, following the passage of HB 1548. It appears to have stalled out in February, while HB 1548 moved forward.

Voters were told at the time that the bond election would have no effect on the tax, and voting no would also have halted the issuance of bonds tied to anticipated federal grants, not just to bonds related to the fuel tax increases. So it's doubtful that they would have registered displeasure with the tax by voting against the bonds.

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This page contains a single entry by Michael Bates published on November 12, 2007 10:30 PM.

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