Missouri Senate backs 6-cent gas, diesel tax increase

By Keith Goble, Land Line state legislative editor | 4/8/2016

An effort is moving forward in the Missouri General Assembly to raise $236 million annually for roads and bridges.

The Senate voted 21-10 on Wednesday, April 6, to advance a bill to the House that would increase the state’s fuel tax rate by 5.9 cents per gallon to 22.9 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.

Sponsored by Sen. Doug Libla, R-Popular Bluff, the bill was amended a week ago to raise rates for gas and diesel by the same amount. As introduced, the bill called for increasing the rate on diesel by 3.5 cents while limiting the rate hike on gas to 1.5 cents.

As a compromise to get the bill through the chamber, Libla removed the tax differential and inserted language to allow voters to make the final decision on the tax increase this November.

Supporters say 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.

The Senate-approved 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.

“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 in recent days while speaking on the Senate floor. “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.

The bill, SB623, awaits further consideration in the House. If approved there, it would move to Gov. Jay Nixon’s desk before the question is added to the state’s fall ballot.

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

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