Missouri bill would increase fuel tax 10 cents

By Keith Goble, Land Line state legislative editor | Thursday, December 07, 2017

While talks continue in Missouri for a solution to the state’s nearly one-half of a billion dollars in annual road and bridge funding needs, a state lawmaker has filed legislation that relies on a fuel tax increase.

A 23-member task force of state officials and private citizens is working on a list of transportation funding recommendations to submit to the Missouri General Assembly by Jan. 1. The 21st Century Missouri Transportation System Task Force was formed earlier this year via legislation approved by state lawmakers.

Missouri state Sen. Dave Schatz, R-Sullivan, is the group’s vice chairman. He is also chairman of the Senate Transportation, Infrastructure, and Public Safety Committee.

Schatz says that he believes one funding option is putting a fuel tax increase to a statewide vote. He has filed a bill for consideration during the 2018 regular session that would raise the state’s fuel tax rate by 10 cents.

Voters would be required to have the final say on the issue.

Missouri now collects a 17-cent-per-gallon tax rate on gas and diesel. The current tax rate, which is fourth lowest nationally, has remained unchanged since 1996.

The task force is considering options to benefit transportation that include raising the state’s fuel tax and/or sales tax rates, tolls, implementing a vehicle-miles traveled mechanism, rerouting revenue from the state’s general fund, and raising vehicle fees.

Advocates for a fuel tax increase point out that since the state last increased the excise rate inflation has risen by more than two-thirds. As a result, they note the 17 cents per gallon that is collected has the purchasing power of only 8 cents of the amount in 1996.

Critics say the fuel tax is a dying tax. They cite a growing popularity of alternatively powered vehicles and others with more fuel-efficient engines.

Each penny increase in the fuel excise tax is estimated to raise up to $40 million. An increase in excess of 10 cents would be necessary to address the $470 million annually the Missouri Department of Transportation says is needed to maintain roads and bridges and for major interstate reconstruction.

Mayors in 27 Missouri communities last month indicated that they want more transportation funding via the fuel pump.

Truck groups in the state also support efforts to raise revenue for transportation work. The Owner-Operator Independent Drivers Association and the Missouri Trucking Association say it is imperative that truckers are not called upon to foot more of the responsibility to help bail the state out of its funding hole.

The groups have opposed efforts in recent legislative sessions that sought to raise diesel tax rates more than gas rates.

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. He has also said a fuel tax increase is the only realistic option for the state.

If a fuel tax increase is approved by the Missouri General Assembly and the governor, the issue would not be a done deal. The state’s Hancock Amendment mandates that any proposed rate hike in excess of two cents must go before voters for final approval. A similar requirement is in place for efforts to add tolls.

Schatz’s bill, SB734, awaits assignment to committee in the regular session that begins Jan. 3.

 

 

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