Who Diverted $1 Million In Highway Money?

Last year the Arkansas Highway Commission gave away $1 Million in highway money to the University of Arkansas to help fund an engineering building. The grant of your money came at the same time the Highway Commission and the Department of Transportation were crying they needed more tax money from you to maintain and improve roads. It was callous to be begging for more of your money while giving away highway money at the same time.[i]

Some legislators blew off the diversion saying the legislature doesn’t have any control of the Highway Commission and Department of Transportation, which is clearly not true.[ii]

Conduit For Action wondered how the diversion was possible since highway funds are levied and collected for highway and road needs.  A Freedom of Information request asked DOT for details of the transfer. What we learned surprised us.

  1. It was the legislature and Governor, not the Highway Commission, who diverted the $1 million away from potholes and diverted it to grants to colleges.
  2. The role of the Highway Commission was only to determine who would get the diverted money.

Documents provided by the Department of Transportation cite the authority for the grant of $1 million to the University of Arkansas as Act 705 of 2017. Among other things, the act created a new fund called the Future Transportation Research Fund and diverted $500,000 per year of interest from highway revenues to use for grants to colleges. (See attached)

Five colleges applied for grants totaling $1,714,876. The University of Arkansas got the entire $1 million. The fact that the University of Arkansas got all the money makes it VERY LIKELY the Governor had the transfer of the money to the University of Arkansas in mind when the special authorization was passed.

Why divert money from highways to fund the UA building instead of funding it directly from General Revenues?  Because the Governor pretends he is controlling spending by limiting the increase of General Revenues.  To carry out this deception he shifts spending to other funds like the highway funds.  IT IS ANOTHER SPENDING DECEPTION.

How can they legally divert money levied and collected for highways?  The answer is technically they didn’t actually grab the money levied and collected for highway needs. Instead they went after the INTEREST received from holding your highway tax money. Talk about carefully crafted language…

While this diversion appears to have been hatched by the Governor as a sly way to fund a college building while trying to look like he was spending less money, who were the legislators who pushed the diversion of money for potholes to building a college building?

The lead sponsor of the Senate bill was Senator Jake Files who also sponsored the Governor’s 2017 attempt to make you pay an internet sales tax.  Unrelated to this legislation, Files resigned and pled guilty to felonies for fraud and money laundering related to taking state money for his own benefit.[iii]

The House cosponsor was Representative Andy Davis.  Davis announced he will not be running for reelection.[iv]

Who voted for the diversion? Follow these links to see how your Senator and Representative voted on Act 705 of 2017 (SB605 of 2017).

When the Highway Commission and the Governor were trying to raise taxes for highways, how much highway tax money should have been diverted? ZERO! In fact, even if they hadn’t been crying for more money the highway money should never have been diverted from highways.

It was diverted and is continuing to be diverted. The $500,000 per year diversion continues into the future. See Section 13 of Act 158 of 2019.[v]

How do you like the sneaky way your Arkansas government operates?  Think about this as the tax on gasoline and diesel fuel is increased. Think about it when a ½ percent sales tax for highways is proposed on your 2020 ballot.


[i] https://conduitforaction.org/incredibly-bad-timing/
[ii] https://conduitforaction.org/we-cant-do-anything-oh-yeah/
[iii] https://www.arkansasonline.com/news/2018/aug/04/1-year-sentence-starting-files/
[iv] https://www.arkansasonline.com/news/2019/sep/13/2-more-house-hopefuls-in-line-20190913/
[v] SECTION 13. APPROPRIATION – TRANSPORTATION RELATED RESEARCH GRANTS.  There is hereby appropriated, to the Arkansas Department of Transportation, to be payable from the Future Transportation Research Fund, for grants to publicly funded institutions of higher education for transportation related research, by the Arkansas Department of Transportation, for the fiscal year ending June 30, 2020, the following:
ITEM FISCAL YEAR 1 NO. 2019-2020