In a news conference Tuesday afternoon, Gov. Asa Hutchinson warned of the consequences to any new highway program if funding for Arkansas Works was not passed.

The governor’s recommendation, announced earlier this year, provides the use of $40 million from accumulated and unused surplus to meet the state match for new federal highway funds.  This transfer is designed to meet the Sept. 30 deadline so that the state will not lose available federal funding for Arkansas highways.  If Arkansas Works does not pass then there will be substantial cuts in state services as a result of the budget hole in excess of $100 million.  As a result, in addition to the cuts indicated by the House’s alternative budget released Monday, conservative budgeting will require the surplus funds to be retained for emergency needs of the state and to fill other gaps in budget shortfalls from prisons to education to foster care needs.

Governor Hutchinson issued the following statement:

“The legislative decision on Arkansas Works funding comes at a critical time for our state’s highway program. From much needed improvements to existing roadways to new and necessary projects around the state – a lot of work is left to be done. If we fail to provide the state’s match by September 30, 2016, we will lose hundreds of millions in federal highway dollars. Part of my proposed plan, in year one, calls for the one-time use of $40 million from accumulated and unused surplus in order for the state to meet the required match. However, that proposal becomes impossible without the funding for Arkansas Works due to the extraordinary budget gap that will result. Highway infrastructure is important to any state, but it is especially important to Arkansas. Our economy has momentum. The private sector is outgrowing the public sector, and the state’s unemployment is the lowest it’s been in decades. A hit to our highways now would be devastating for future economic growth.”

Mike Preston, Executive Director of the Arkansas Economic Development Commission (AEDC) issued the following statement:

“Success in economic development starts with a solid infrastructure base. Highways are an extremely important component of that infrastructure. If we start utilizing highway funds to cover cost gaps in other programs, Arkansas then becomes less attractive to companies considering expanding or locating here.”