by Ron McLinden Ozark Chapter Transportation Committee Chair
By the time you read this, decisions will probably have already been made regarding whether Missouri faces up to its transportation funding crisis.
Missouri’s transportation needs far exceed the money available to meet those needs. MoDOT says the difference is $1 billion per year. $100 million of this would be for public transit and an additional $20 million or more for inter-city passenger rail and buses.
Missouri voters will have to approve any tax increase to raise the money. The issue could be on the ballot either in August or November this year. The main question is, how big an increase?
Several transportation tax bills have been considered in the General Assembly. The front-runner in the Senate is SB 915 introduced by Senator Morris Westfall. It would yield about $475 million per year by raising the gas tax by 6 cents per gallon and the general sales tax by three-eighths of a cent.
In the House, it is Representative Don Koller’s HB 1570. His bill, as introduced, would raise the gas tax by 4 cents per gallon and the general sales tax by one cent, yielding about $1 billion per year. It has since been scaled back to yield about $650 million per year.
If both pass, some sort of compromise would be worked out in a conference committee.
Meanwhile, Missouri’s major business and transportation interests have laid the groundwork for an initiative petition campaign to put a measure on the November ballot that would yield about $650 million per year. Three versions were filed with the Secretary of State on February 22: a one-cent sales tax; a three-fourths cent sales tax with a three-cent gas tax; and a five-eighths percent sales tax with a five-cent gas tax. Each of the alternatives reportedly would provide about $80 million per year for transit. Public polling – likely to take place in late March – would determine which proposal would actually be circulated to get the 200,000 or so signatures needed by May 5 to put the issue on the ballot.
If anything actually happens this year, it won’t be enough to satisfy anybody. Highway folks would really like the nearly $900 million per year MoDOT says they need. Transit and rail passenger folks really want the $120 million or so needed to meet the identified needs, including funding to upgrade track for higher-speed rail passenger service between St. Louis and Kansas City.
In testimony before a Senate committee in November we contended that highway needs were “fully funded” – at least at the level identified at that time – when the so-called fifteen-year highway plan was funded back in 1992. We contended that transit needs ought to be “fully funded” before additional funds are sought for highways. That argument doesn’t go over well in the Capitol.
To make matters worse, transit is in an especially weak financial position this year, and so is not in a good bargaining position. Local sales taxes have declined and forced service cuts. And with the state also having budget problems, just getting an annual appropriation of about $8.5 million to help support transit operations is taking time that would otherwise be devoted to getting a bigger share of a transportation tax package.
The source of new transportation money is also a major problem. There’s not much resistance to funding transit with a sales tax – though one could certainly make a good case for funding it from gas taxes – but reliance on a sales tax for highway funding rubs a lot of people the wrong way. The sales tax is regressive – low-income people pay a greater percent of their income in sales taxes than do upper-income people. Thus, there is a widespread feeling that the new funds should come more from a gas tax than a sales tax.
Unfortunately, the gas tax has its limits. Raise the gas tax much higher than that in adjoining states, and a lot of people will simply buy their gas elsewhere – and that could result in gas tax revenues lower than anticipated. This is particularly true in the Kansas City area where many Missourians either commute to Kansas daily for work or live relatively close to the Sunflower state.
At this writing it’s hard to predict what will happen. We should and will be working to influence a package that fully meets transit and inter-city passenger transportation needs, and that raises as much of any new highway money as possible from the gas tax and other user fees. You can help by telling your own legislators where you stand.
By going after the sales tax to make up for the highway funding shortfall, truckers and other highway people will have to forever abandon their fictitious claim they pay their own way. Anyone with an open mind would acknowledge that local streets are largely financed by local property taxes, and that means a lot of gas tax money attributable to local travel on those streets actually goes to fund highways. In fact, it’s going to be tough for the highway users to refute the argument that, had they actually been paying their own way for the roads they’ve been using all these years, Missouri wouldn’t be in its current highway pickle.