Missouri Senate revamps fuel tax increase bill, gives voters final say

By Keith Goble, Land Line state legislative editor | 3/31/2016

The Missouri Senate has given initial approval to a revised bill that would raise $236 million for roads and bridges each year. Voters would get the final say.

A substitute for SB623 was approved on Wednesday, March 30, to increase the state’s fuel tax rate by 5.9 cents per gallon to 22.9 cents. The original version called for raising the rate on diesel by 3.5 cents while limiting the rate hike on gas to 1.5 cents.

The Show-Me State now collects a 17-cent-per-gallon tax rate on gas and diesel. The current tax rate has remained unchanged since 1996.

Sen. Doug Libla, R-Poplar Bluff, has said that something needs to be done to help the Missouri Department of Transportation address an approaching funding cliff.

The state’s construction budget for roads and bridges has fallen from about $1.3 billion annually in 2010 to less than half that amount this year. The annual budget is projected to dip to $325 million by 2017 – the lowest since 1992.

As a compromise to get the bill through the chamber, Libla removed the tax differential and inserted language to allow voters to weigh in.

The amended rate hike would raise $165 million annually for state highways. Another $71 million would be routed to local roads and bridges.

Libla says the fuel tax is a more realistic option to pay for infrastructure work than authorization for public-private partnerships.

“We’ve heard a lot about three P’s around this building. (This senator) has four P’s. This plan is prudent, practical, predictable, and has precedent,” Libla said while speaking on the Senate floor.

He added that it is time for action at the statehouse.

“There has been a lot of can-kicking and rhetoric over the last year about how to address the serious shortfall in our highway and bridge funding needs,” Libla said. “It is this simple: Since 1924, the motor fuel user tax is the way we invested in our highways. Period.

Truck groups in the state support efforts to raise revenue for transportation work. However, the Owner-Operator Independent Drivers Association and the Missouri Trucking Association opposed the bill as introduced because it called for truckers to foot more of the responsibility to help bail the state out of its funding hole.

“While OOIDA believes increasing the motor fuel tax is the most equitable way to generate additional revenue – and quite frankly the only realistic option in Missouri – any increase should be applied equally to both gasoline and diesel,” OOIDA Director of State Legislative Affairs Mike Matousek has said.

Tom Crawford, president and CEO of the Missouri Trucking Association, has added that both truck groups in the state are working together to make sure legislators understand that truckers already pay more at the pump and during registration.

The bill needs another vote to advance to the House for further consideration. If approved there, it would move to Gov. Jay Nixon’s desk.

However, the governor’s signature would not guarantee a rate increase. Senators included a provision to let voters decide this November whether to implement the higher tax rate.

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

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