Highway Bond Bill Sets Stage for Transportation Tax in 2001

by Ron McLinden 
Ozark Chapter Transportation Chair

Among the few things that the Missouri General Assembly actually did this year was to pass a bill authorizing sale of up to $2.25 billion in bonds to finance an accelerated highway construction program. The rationale was that MoDOT needed additional money to “prove” to the legislators that they could deliver on their promises, and thereby partially redeem themselves for the failure of the doomed from the start “fifteen–year plan” of 1992.

The Sierra Club, along with the Coalition for the Environment, Citizens for Modern Transit, and the Regional Transit Alliance, opposed the bond authorization bill because it included nothing for the state’s non–highway transportation needs. The highway folks won. We lost.

If anything good has come of it, it is that people are still talking about “total transportation.” It would have been better if the legislature had actually voted money for total transportation, mind you, but at least they are still talking about it. And that includes many of the leaders in the highway construction industry. Not only that, but the construction folks actually expressed reservations about the bonding program because it borrows against future revenues without doing anything to assure that those revenues will be adequate to pay off the bonds as well as continue future road building.

Additional revenue is where the next General Assembly comes in again.

Next year, so the expectation goes, the legislature will tackle the thorny issue of how to raise the $20 billion or so in new revenue that MoDOT will need to meet the transportation needs identified in study after study, including that of the Total Transportation Commission. Without an infusion of additional money the state’s road building could come to a screeching halt about 2007 when the most recent increase in the gas tax — a six–cent increase passed in 1992 to finance the fifteen–year plan — expires. That tax expiration “brick wall,” coupled with continued willingness to think in terms of “total transportation,” appears to be the best hope for finally meeting the needs of Missouri’s non–highway modes.

An attempt to raise taxes for transportation will almost certainly happen next year — though the precise details might well be different — regardless of who sits in the Governor’s office and which party rules the two legislative houses.

The big questions will be: what kind of transportation package will be proposed? how much revenue will be sought? and what kinds of taxes will be proposed?

MoDOT is currently working on a new Long–Range Transportation Plan that should play a strong part in determining the kinds of projects and programs to be funded. The plan, a draft of which is to be shown to the Missouri Highway and Transportation Commission at its July 7 meting, will be the first major product of MoDOT’s newly recentralized Planning Division. We’ve heard that there will be a good balance of programs in the plan, perhaps even including some language about the importance of local growth management to hold down transportation needs. But we’ve also heard skepticism from the urban areas about the credibility of the work that is going into the plan.

Here are some general principles that should come into play as the new Long–Range Transportation Plan gets translated into a tax increase package:

1 – There is no single solution to any of our transportation problems. Simply adding lanes will not ease traffic congestion, at least not for more than a few months. We need to harness new ways of thinking for the new millennium. Transportation is not about just putting people and goods in motion. Transportation is one way of providing for “access” to goods and services, to jobs and opportunities. Access can also be enhanced by putting things closer to where they are needed. So–called “smart growth” principles of city and town planning can play an important part in solving our transportation problems.

2 – We have to get over the “fifteen–year plan.” That list of projects, concocted back in 1992 to lure legislators into passing a six–cent gas tax increase without voter approval, was never a legitimate plan and was never held up to public scrutiny. Most of the projects it envisioned are legitimate and will be built anyway. But even the most ardent fifteen–year plan proponent will admit that some of the projects it envisioned are not needed. Therefore, insisting that the promises of the fifteen–year plan be kept is an absurd position to take, and it just gets in the way of working out a sensible solution for 2001.

3 – We may have to scale back our expectations regarding what the state should pay for. Item: There are thousands of miles of Missouri’s 32,000 mile road system that carry fewer than 100 cars per day. That’s fewer cars than pass by your own house, unless you live on a very short of cul–de–sac. Should the state maintain those roads, or should a lot of them be turned back to the counties? Item: Much of the traffic on state routes in and around cities and towns is local traffic. I–70 carries 25–30 thousand vehicles per day at Concordia or Kingdom City, but the count jumps to 50–60 thousand at Columbia. Is it the state’s job to give Columbians a way to save three minutes on a 4–mile trip across town to get to the bargain of the day at the mega–mart on the east side of town or the colossal mall on the west? Or should we want I–70 to instead serve mostly people making longer non–local trips?

4 – We should give greater attention to “travel demand management” strategies. Improve local roads to serve local trips. Improve local public transit, and improve inter–city passenger rail and motor coach service. Give greater attention to the details of city and town planning to make walking and bicycling and transit more attractive options. Implement programs and incentives to encourage ride–sharing. These and a lot of other actions need to be taken to reduce congestion now, and to postpone or even eliminate the perceived need for highway “capacity” projects in the future.

5 – We should make greater use of “market mechanisms” to address congestion problems. Viewed from a supply and demand standpoint, congestion results when travel demand exceeds the supply of space on a street or highway. Most congestion occurs during morning and evening weekday travel periods. In a free market situation, prices would come into play to reduce the peaks and bring demand into balance with supply. Oddly, when it comes to transportation, the preferred reaction is to simply increase supply — roadway capacity — even when we know the capacity is likely to be needed only a few hours a week. So–called “congestion pricing” strategies should be explored and implemented wherever feasible. This might involve charging a small toll for entry onto an urban freeway during peak travel periods. The result is that some drivers would choose to travel by other routes or at other times of day, and those who do pay the toll would be assured a less–congested trip. “Ramp metering” might accomplish much the same purpose by imposing the “toll” in the form of a short wait before being allowed to enter an urban freeway. Simply providing information — an essential element of the market system — can be a big help. By telling drivers that congestion is usually less 20 minutes earlier, or 10 minutes later, we could help them make better–informed travel decisions.

6 – User fees have to be raised as part of any transportation financing package. We should not expect to raise the sales tax until motor fuel taxes, vehicle license fees, and drivers license fees have been raised at least to just above the average of Missouri’s neighboring states. Opponents will whine that increased user fees will result in higher consumer prices. But isn’t that the way it should be? If I buy a locally made product that requires little transportation while someone else buys a remotely–made product that requires a lot of transportation, should I be expected to pay a sales tax to subsidize the remotely–made product? Only through increased user fees can we expect to see a truer allocation of actual transportation costs.

7 – Transit and the other non–highway modes should get a significant part of the funding package. At transportation “stakeholder” meetings held all over the state in April and May as part of the Long–Range Transportation Plan process, participants were asked how they would divide up a hypothetical dollar among several transportation priorities. Participants overall allocated 10.6 percent to public transit, plus 3.3 percent for bike and pedestrian accommodations and 7.9 percent for inter–city bus and passenger rail. That’s quite an increase over the near–zero share that Missouri currently provides to those modes. (Participants gave 10.4 percent to aviation and only 67.8 percent to highways.)

A lot of things will be new next year when the General Assembly starts to consider a tax increase for transportation. Not the least of these is the size of the request: about $1 billion annually. It is likely that a big chunk of that money will end up coming from traditional general revenue sources such as the sales tax. Thus, transportation needs will come into direct competition with other state needs like education and health care. The old “highway users pay their own way” argument — which has never actually been true — will at long last have to be laid to rest.

Whatever the legislators decide, a transportation tax package will have to be approved by the electorate. Presumably that will help to keep things in balance. Organizations like the Sierra Club will play an important role, too. We’re going to have to watch this whole transportation financing situation closely as it unfolds over the next half year. And we’re also going to have to do whatever we can, both directly and indirectly, to be sure the outcome next session isn’t “everything a highwayman could possibly want for highways, plus a pittance or two for transit and other modes to keep them happy.”