Missouri Senate panel approves 6-cent fuel tax increase

By Keith Goble, Land Line state legislative editor | 4/7/2015

A push for nearly one-quarter of a billion dollars more for Missouri roads and bridges each year is moving through the statehouse.

The Senate Transportation, Infrastructure and Public Safety Committee voted to advance a bill that would increase the state’s 17.3-cent-per-gallon fuel tax rate by 6 cents over three years. The current tax rate has remained unchanged since 1996.

The bill, SB540, awaits a Senate floor vote. If approved there, it would move to the House for consideration before it could go to the governor’s desk.

If signed into law, the tax rate would increase 2 cents on Jan. 1, 2016, and another 2 cents in 2017, followed by the final 2-cent bump to 23.3 cents per gallon one year later. The rate hike is estimated to raise $235.5 million annually at the end of the phase-in period.

Sponsored by Sen. Doug Libla, R-Poplar Bluff, the bill would also implement annual increases for inflation.

Advocates for a tax increase say something needs to be done to help the Missouri Department of Transportation address an approaching funding cliff.

MoDOT Director Dave Nichols has referred to the state’s construction budget for roads and bridges, which has fallen from about $1.3 billion annually in 2010 to $685 million one year ago. He added that there is no light at the end of the tunnel. The annual budget is projected to dip to $325 million by 2017 – the lowest since 1992.

The Owner-Operator Independent Drivers Association supports the effort to raise revenue for transportation in Missouri.

In a letter of support sent to the Senate panel, the Association said that increasing fuel taxes is “the most equitable way to generate additional revenue, and quite frankly it is the only realistic option in Missouri.”

Mike Matousek, OOIDA director of state legislative affairs, said that the Association would withdraw its support for the bill if changes are made that would tax diesel at a higher rate than gas, divert revenue generated from fuel taxes to non-highway purposes, or implement a vehicle-miles traveled tax.

The Missouri State Auditor’s Office last week released findings of an audit of MoDOT that found the agency misused more than $7 million in money meant for roads over the two-year period that ended in June 2014.

A portion of the revenue went to salaries and benefits of employees with the department. Other disbursements included reimbursing an employee to help cover the loss on a sale of residential property and to cover legal settlements with former employees.

OOIDA also encouraged state lawmakers to consider making a change to SB540 that would permanently prohibit toll projects throughout the state.

“If SB540 is enacted, it would not be unreasonable to concurrently enact a ban on toll projects,” Matousek said.

Other bills at the statehouse to increase the fuel tax rate include:

HB995 and HB1168 would increase the per-gallon rate by 2 cents to 19 cents at one time.
HB738 would convert the excise tax from a cents-per-gallon rate to a percentage rate starting in January 2016. The change would allow for regular increases.

To view other legislative activities of interest for Missouri, click here.

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