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Danny Johnston, Associated Press
Freshman Representative Greg Leding, D-Fayetteville, recites the Pledge of Allegiance during opening day ceremonies of the 88th General Assembly at the Arkansas state Capitol in Little Rock, Ark., Monday, Jan. 10, 2011.

LITTLE ROCK, Ark. — Arkansas House Speaker Robert Moore urged lawmakers to find a way to pay for billions of dollars of unfunded highway needs as the state Legislature convened on Monday but faced a skeptical Senate and a wave of Republican lawmakers elected on an anti-tax platform.

Members of the House and Senate convened for the first day of the 88th General Assembly, despite a snowstorm that kept many Arkansans at home and shut most government offices. The Legislature faces difficult decisions on tax policy, highways, Medicaid and prison reform as it tackles a $4.6 billion budget from Gov. Mike Beebe that predicts a slight uptick in state revenues.

"We don't have enough money to maintain (highways), much less do the things that every Arkansan would like to see done and that's the four-lane grid system," said Moore, D-Arkansas City.

Arkansas faces $19 billion in highway needs over the next decade, when $4.1 billion is expected to be available to cover the costs. Officials say the current highway-financing methods of per-gallon taxes and registration fees are no longer enough to make up the gap.

A committee formed to study highway funding issued several recommendations last year on boosting money for the state's roads, including a new excise tax on the wholesale price of motor fuels, diverting sales tax revenue on cars and transportation products to highway projects and referring to voters a half-cent sales tax to pay for a 10-year highway bond program.

Beebe has said he doesn't think now is the right time to raise taxes, but Moore repeated his call for legislators to act courageously and come up with a way to fund the state's roadways.

"Highway funding is a critical issue to economic development in the state of Arkansas," he said.

Senate President Paul Bookout, D-Jonesboro, said he's not sure how much support a tax increase will have in the Senate.

"I don't think right now is a time we need to be putting a tax increase on citizens," Bookout told reporters. "That's just a strong feeling I have. I'm hesitant there's going to be enough support for that, but we'll see."

Rep. Jonathan Barnett, who Moore named House Transportation Committee chairman, said it may be easier to win support for referring a tax increase for road improvements to voters on the 2012 ballot.

"I don't think the Legislature is in any mood to do any tax increases right now," said Barnett, R-Siloam Springs, a former member of the state Highway Commission.

Moore faces skepticism not just from Republicans who were elected on pledges to cut taxes and government, but from fellow Democrats as well.

"It's always a priority, but I'm just not sure there's anything we can do about it this session," said Sen. Steve Harrelson, D-Texarkana.

Beebe is scheduled to address a joint session of the House and Senate on Tuesday before being inaugurated for his second term as Arkansas governor. The incumbent Democrat has said a top priority for the session is his proposal to cut another half-cent off the state's sales tax on groceries, but he faces resistance from some lawmakers who are interested in other reductions.

Much of the tax-cut debate will likely come toward the end of the session, when legislative leaders say they'll have a better idea of how much the state can afford to reduce its revenues. Competing ideas in the Legislature include a cut in the state's sales tax on used cars and a cut in the tax that manufacturers pay on their utility bills.

Beebe has said that the state cannot afford any tax relief — other than the grocery-tax cut — in his proposed $4.6 billion general revenue budget for the coming year. Republicans hold a majority of the seats on the House Revenue and Taxation Committee, and the panel is equally split in the Senate.

Rep. Davy Carter, R-Cabot, who Moore named Monday as chairman of the House Revenue and Taxation Committee, said he wants to see what tax cuts can best spur job growth in the state.

"There's lots of good ideas out there, but only so much money around," Carter said. "It's going to be prioritization at a nuclear level."

Lawmakers will also be asked to look at ways to overhaul the state's prison system and the Medicaid program to curb skyrocketing costs.

A working group last week recommended several changes that it says could cut prison population growth by 3,200 inmates over the next decade and save $875 million. If left unchecked, the prison growth could cost the state an additional $1.1 billion over the next decade, the group said in its report.

The group's recommendations include changes to the sentencing guidelines for some low-level drug and theft offenses, ideas that face some resistance from lawmakers and prosecutors. Beebe hasn't endorsed any proposals from the group's report, but says action needs to be taken to avoid future costs.

Beebe also faces a push from some Republican lawmakers who want the state to reject the health insurance mandate that's included in the health care overhaul. Beebe's said he's opposed to the proposal but has stopped short of threatening to veto it.

Beebe has also said he's going to seek changes in the state's Medicaid system, which he says could face cuts in its services in the 2012 legislative session. Beebe says he's looking at increased provider tax collections and also at changes in the way Medicaid pays for services.

Lawmakers may also be asked to raise taxes on businesses, at least temporarily, to repay more than $330 million Arkansas owes the federal government for unemployment benefits. Arkansas has been trying to negotiate a compromise between business and labor groups to support a way to repay the money before the federal government acts to recoup the loan on its own.

Both chambers are led by lawmakers with deep political roots in Arkansas. Moore was sworn in as House speaker 100 years, almost to the day, after his grandfather, Isaac Norman Moore took a seat in the same chamber.

"He loved politics, he loved serving in the Legislature . and he loved the state of Arkansas," the speaker said.

Bookout is the son of the late Sen. Jerry Bookout, who served as Senate president 20 years ago.

"This is kind of like home to me," said Bookout, who was elected to the Senate in 2006 to finish his father's term after he died in office.