Missouri 6-cent gas, diesel tax increase moves forward

By Keith Goble, Land Line state legislative editor | 5/4/2016

A Missouri bill to raise $236 million annually for roads and bridges continues to advance through the statehouse.

The House Transportation Committee voted on Tuesday, May 3, to advance an amended bill to increase the state’s fuel tax rate by 5.9 cents per gallon to 22.9 cents. Senate lawmakers already approved the bill on a 21-10 vote.

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.

As amended in the Senate the bill would raise rates for gas and diesel by the same amount. The introduced version 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, Sen. Doug Libla, R-Popular Bluff, 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 rate hike would raise $165 million annually for state highways. Another $71 million would be routed to local roads and bridges.

Libla and other bill advocates say the fuel tax is a more realistic option to pay for infrastructure work than authorization for public-private partnerships.

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.

OOIDA Director of State Legislative Affairs Mike Matousek has said the Association believes increasing the fuel tax is the most equitable way to generate additional revenue.

“Quite frankly a fuel tax increase is the only realistic option in Missouri. Any increase should be applied equally to both gasoline and diesel,” says Matousek.

The bill, SB623, awaits further consideration on the House floor. If approved there, it would move back to the Senate for approval of House changes before advancing to Gov. Jay Nixon’s desk.

Nixon has said he favors a fuel tax increase of about 2 cents – nearly the same amount as Libla’s introduced version.

If approved by the governor, the tax question would be added to the state’s fall ballot.

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

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