Missouri Senate readies for transportation tax debate

Bills should come up in next couple of weeks

After taking testimony on both bills Wednesday morning, the Missouri Senate's Transportation and Infrastructure Committee last Thursday recommended that the full Senate pass two, slightly different, proposed constitutional amendments to pay for transportation improvements around the state.

But the committee's report wasn't turned in to the full Senate before lawmakers left for the Easter weekend, so neither bill is on the Senate's debate calendar, yet.

"I expect in the next couple of weeks we'll have the conversation," Committee Chairman Mike Kehoe, R-Jefferson City, said last week. "Clearly, the House bill is the vehicle that we will try to pursue on the floor."

Both bills propose constitutional amendments seeking voters' approval in November to add a one-cent general sales tax for 10 years, to pay for transportation improvements.

The tax is estimated to generate about $8 billion over the decade, with 5 percent of the collections directed to city governments, another 5 percent to counties and the rest to the state Transportation department (MoDOT) for statewide needs.

Kehoe sponsors the Senate's version, while Rep. Dave Hinson, R-St. Clair, sponsors the House version that passed in that chamber on April 9 by a 96-53 vote.

"We're giving Missourians an opportunity to vote on it, to see if they want to do that or not," Kehoe said. "We're telling them how long this would last and what specific projects would be paid for.

"So, it's a very clear investment of their tax dollars."

Missouri currently pays for transportation projects with money generated by a 17 cent tax on each gallon of gasoline or diesel fuel sold in the state - for vehicles that travel the highways.

But the state Constitution limits money raised by those taxes to be used only for road and bridge construction and maintenance, and for MoDOT and state Highway Patrol operations.

Other forms of transportation must be funded by general revenue income, local sales taxes or federal funds.

Missourians also pay an 18.4 cents-per-gallon tax on gasoline to the federal Highway Trust Fund, and 24.4 cents-per-gallon on diesel fuel, that's used for the federal government's share of road and bridge projects as well as airplane, railroad, water, bicycle and walking trails, passenger bus and metropolitan light rail systems.

Each year, the federal government spends approximately $50 billion on surface transportation programs, with about $46 billion coming from the Highway Trust Fund.

Hinson told the Senate committee last week: "The federal government's funding the highway fund out of general revenue - and there's not a guarantee that they will continue funding it out of general revenue.

"So, with getting about 44 percent of our funding from the federal government, that could cause our state to take a big hit."

Raising the sales tax could erase some of those uncertainties and help repair or replace roads like Interstate 70, which has sections in the St. Charles area close to 60 years old - far older, and carrying much heavier traffic, than it originally was designed for, Hinson said.

But Sen. John Lamping - R-Ladue and a long-time, vocal opponent of paying additional taxes for road improvements - reminded Hinson on Wednesday: "Both the Senate and the House have agreed to cut taxes, anywhere between $600 and $900 million a year.

"During the House debate, did anyone happen to point out the fact that the $600 and $900 million ... could serve as a potential funding source for the roads?"

Lamping's comments came Wednesday morning, several hours before the House passed and sent to Gov. Jay Nixon an income tax cut bill reducing the state's revenue by at least $600 million a year when it takes full effect after 2017.

Hinson said the issued didn't come up, and Lamping noted he's proposed a different constitutional amendment that, when phased in after four years, would redirect .5 percent of the state's current 3 percent sales and use tax - or one-half cent of each 3 cents collected - to the state's road fund.

"This is a very simple solution," Lamping said.

But his proposed amendment was referred to the Transportation Committee on Jan. 30, and Kehoe, as chairman, never has been scheduled it for a hearing.

"I think the important thing to remember is, the (sales tax) concept we would like to put before the voters, now, has been vetted for over seven years," Kehoe told the News Tribune. "We've had all kinds of hearings through MoDOT and the Transportation Alliance and the chambers of commerce going around the state - as well as other stakeholders talking to folks about it, literally, for years, and that has been the solution that has been the best-received."

Kehoe said he's told Lamping: "Even though the version that Rep. Hinson and I are supporting has some enemies - I believe that when you take $450 or $500 million away from general revenue, you bring even more enemies to the table.

"That's what's going to be critical - to get something before the voters that has the ability to pass."

A MoDOT history shows Missouri voters first approved a fuels tax - 2 cents a gallon - in 1924.

Voters in 1938 and 1950 rejected a proposed one-cent increase, but lawmakers approved that change in 1952.

In 1961, voters approved a 2-cent increase to 5 cents, passing a constitutional amendment sharing some of the revenues with the cities and counties for the first time.

Lawmakers raised the tax another 2 cents in 1972.

But voters rejected a 1978 proposal to add another 3 cents, and a 1982 proposal to increase the tax by 4 cents.

Voters statewide approved Proposition A, a 4-cent increase to 11 cents a gallon, in 1987.

In 1992, lawmakers approved a 6-cent increase, to the current 17 cents, phasing it in over a five-year period.

So, it's been 17 cents per gallon since 1996.

Voters in 2002 rejected a proposed 4 cents-a-gallon fuel tax increase combined with a half-cent sales tax increase, but they approved Amendment 3 in 2004, increasing MoDOT's available cash by stopping its payments to some state agencies, such as the auditor's office, for their highways-related work.

The new, proposed one-cent sales tax would raise at least $700 million a year, while a one-cent fuels tax increase would generate about $30 million. So, to generate the same amount of income, voters would have to approve at least a 23.5- or 24-cent hike in the fuels tax.

At 17 cents, Missouri's fuels tax is one of the lowest in the nation.

At 40 cents or more, it would become one of the highest.

"Even though we have one of the lowest gas taxes in the nation - voters clearly have said to us, in many polls and many forms that I have been involved in, they would not support that," Kehoe said.

Several people argued during Wednesday's hearing that focusing on a fuel-tax increase - or some other change clearly tied to people's use of the system - is the more fair way to go.

But, as he's said before over the past couple of years, all sales tax payers are transportation users.

"There's not much you can do in a modern-day economy in any state, much less Missouri, without somehow taking advantage of a product that got to that location via a transportation method," he explained. "Obviously, the direct users are car and truck drivers - but indirect users are people who may rely on products that got delivered - and they may also may use mass transit, (which) uses the roads and the system."

Upcoming Events