JEFFERSON CITY --

After two decades of kicking rattling cans of change along roads sprouting potholes, might anti-tax Missouri be prepared to raise its motor fuel taxes to start catching up on delinquent transportation needs?
A new study on the state's unaddressed road and bridge issues has prompted introduction of 10 bills and resolutions in the current session of the Missouri General Assembly.
Missouri excels in prime location and transportation resources stated the bipartisan 21st Century Missouri Transportation System Task Force, which held meetings across the state last year and issued a 67-page report on Jan. 1.
But, the report continued, Missouri also trails most states in funding for roads and bridges -- ranking nearly last, actually. The result is an estimated annual shortfall of $825 million in spending for repairs and new construction.
The tax force called upon legislators to place a fuel tax increase on the ballot, as required by the state Constitution, and to consider other means of raising future funding. They issued this summary to the state's tax-phobic leaders:

 Although Missouri has the seventh-largest state highway system in America, with the sixth-highest number of bridges, the state funds its transportation system at only 47th in the nation in revenue per mile. Consequently, our aging transportation-infrastructure system is deteriorating, the safety of highway travelers is put at risk, and declining transportation reliability is threatening economic growth, despite the best efforts of the Missouri Department of Transportation.

 This funding deficiency did not arise overnight, but over a period of years, as past political leaders have failed to recognize or act upon the need to address transportation-infrastructure investment. Many people who testified at the Task Force’s hearings used the idiom of “kicking the can down the road” to describe the state’s approach to addressing (or not addressing) transportation funding in recent years.

The 23-member task force was chaired by Rep. Kevin Corlew, R-Kansas City. The vice-chairman, Sen. David Schatz, R-Sullivan, has introduced Senate Bill 734 in the current session of the General Assembly. The bill would add 10 cents per gallon to Missouri's 17-cent fuel tax, which was last changed in 1996.
Other bills would raise the tax gasoline from in amounts ranging from 2 cents to 17 cents per gallon.
One bill, curiously, would raise the fuel tax in 3-cent increments if the increases were offset by cuts in state income taxes, which come from and go into entirely different funding pools -- like paying more for home electricity only if it can be deducted from the natural gas bills.
The time may have come for an increased tax even in Missouri, which currently has the fourth-lowest fuel tax in the country. Inflation has reduced its purchasing power to the 1996 equivalent of 8 cents, the Task Force reported.
An increase has been endorsed by Missouri AAA as well as some of the lobbying organizations that often dictate outcomes of such matters, including the trucking industry and Missouri Farm Bureau. 

"AAA has long recognized that the Missouri Department of Transportation needed additional funding to maintain and improve the state's roads," said Mike Right, vice president of public affairs for AAA Missouri. "What should also be obvious is that with population growth and development outside the urban cores, roadway needs continue." 

Some proposals would increase the tax on diesel fuel by 12 cents while the gasoline tax goes up 10 cents because it is said the heavy trucks put more wear and tear on roads and bridges. The trucking industry holds that trucks already pay more fuel taxes per mile because they use at least three times as many gallons of fuel per mile than automobiles. 
The federal government is not expected to assist in addressing road and bridge deficiencies nationally. 

While President Trump has proposed a ten-year plan to spend $1.5 trillion on infrastructure, he proposes that the federal government contribute just $20 billion annually (or $200 billion over ten years).
The task force notes that 27 states have increased fuel taxes since 2013.

Miles and Miles
"Missouri has a large highway system that includes 33,884 miles of roadway (America’s seventh-largest state highway system); and 10,394 bridges (the sixth-most nationally). The highway system is aging. The oldest stretches of the Interstate highway system in the state, for example, were built in the 1950s with a 20-year life expectancy. Moreover, a large portion of state-maintained bridges have surpassed their 50-year design lives," according to the task force.
Missouri ranks 47th out of 50 states in terms of transportation revenues per centerline mile of state-maintained highway. (Bordering states have two to five times as much revenue per centerline mile.) And Missouri does not have the benefit of user-based toll revenues (or federal toll credits) collected in states such as Kansas, Oklahoma, Kentucky, Illinois, Indiana and Ohio.
The fuel tax is the largest source of funding for roads and is said to cost the average resident $30 monthly. The 10-cent increase would restore the tax's equivalent buying power to what it was in 1996.

 The Task Force wrote that the shortfall in infrastructure investment costs the state through increased traffic congestion, wasted fuel, increased crash risks and vehicle damage and tire wear resulting from rough roads.

 "Roads and bridges aren’t being improved sufficiently; The transportation system isn’t as safe as it could be; Economic growth is being stifled; Travelers too often are delayed because of traffic congestion; Interstate highways need to be reconstructed but instead are merely maintained; Multimodal transportation options are neither enhanced nor increased."

 The proposed tax increase would create about $430 million in new revenue, which would be split among the state, county and local highway departments.

"The proposed increase would still keep Missouri competitive with surrounding states and nationally," t
he Task Force reported.
City and county roads would receive a portion of the increased tax revenue.
The Missouri Constitution allocates 70 percent of the revenues to the state, 15 percent to cities, and 15 percent to counties. Thus, the state road fund would receive approximately $2.6 billion, while cities and counties would each receive approximately $557 million.

 The Task Force identified the fuel increase as the first step in longer-term planning for future transportation funding needs.  

Missouri Transportation Resources

Because of existing strengths, Missouri is poised (with strategic policymaking and proper investment) to have a world-class transportation and to be a leader in travel, logistics, and freight distribution. Missouri has a large system of road, highways, and bridges, including major interstate highway corridors that provide easy access for freight transportation.

In addition to the immediate fuel tax increase, the Task Force recommends that the General Assembly consider additional options in the future, including:
*  Increased registration fees for electric vehicles and excise fees or taxes on electric charging stations and systems;
*  Increases to user fees for driver’s licenses and vehicle registrations;
* Indexing motor fuel taxes and licensing and registration fees to inflation;
* Basing vehicle-registration fees on fuel efficiency (MPG) instead of horsepower; 
* Dedicating a portion of Internet sales-tax revenue to transportation purposes;
* Consider tolling for construction of major bridges;
* Consider mileage-based road-user charges; and
*  Enable local construction excise taxes.

Missouri's highway ledger holds 5,517 miles of interstates and "major routes," of which about 90 percent are rated in "good" condition. Interstate 70, however, "needs to be reconstructed with added capacity to handle mounting levels of traffic, especially long-haul trucks. The project, though, has been and continues to be unaffordable. The state’s other six interstates will also be facing improvement/preservation needs in the coming years."

Missouri has 17,450 miles of "minor" routes with 80 percent rated "good."
The state's scenic, rolling terrain requires a lot of bridges that create potentially expensive maintenance burdens. The task forces states:
"Missouri has 10,403 bridges of varying sizes, including 207 major bridges that are longer than 1,000 feet (about the length of three football fields). Currently, 883 bridges are in poor condition. MoDOT inspects these bridges on a regular basis to ensure they’re safe for travelers. If a bridge is unsafe, it is closed until repairs can be made. Missouri also has 1,253 weight-restricted bridges, with 466 of them also in poor condition."

Missouri roads and highways carry 74 billion miles of vehicle travel and $371 billion worth of freight annually, the report adds. "The nation’s second- and third-largest railroad hub centers are at either side of the state, in Kansas City and St. Louis, respectively. And Missouri has more than 1,000 miles of inland waterways with the Mississippi and Missouri rivers combined, and 14 public port authorities facilitate commerce on these rivers."
There is also recognition that the federal government is looking to states to self-fund more of their transportation needs as the federal Highway Trust Fund deficit grows.
The federal gasoline tax (18.3 cents per gallon on gasoline and 24.3 cents per gallon on diesel), which is the primary source of federal transportation dollars, has not been adjusted since 1993. Under the current political environment it is not going to be adjusted.

 The task report lists the 2016 budget allocations for Missouri transportation funds: $1.4 billion (58 percent) to construct, operate and maintain the system; $408 million (17 percent) to cities and counties; $280 million (11 percent) for debt service; $230 million (9 percent) to the State Highway Patrol to administer and enforce state motor vehicle laws and traffic regulations; and $20 million to the Missouri Department of Revenue to collect and administer the revenue.

About four percent of revenues—derived from general appropriations and not the State
Road Fund—support "multimodal" transportation such as rail, transit, waterways and ports.
There is widely-held consensus that more transportation funding is needed in Missouri, the report states. "Increasing the motor fuels tax was mentioned the most during testimony as the preferred form of funding increase. Several reasons were cited, including:
The motor fuel tax is user-based; Consumers recognize its significant nexus to travel on the highway system; The tax is paid by Missouri citizens and out-of-state motorists as they travel through Missouri; Missouri already has a constitutional lockbox on a motor fuel tax, such that the generated revenue can be used only for the highway system;
"There is an efficient means of collecting the revenue already in place; Missouri’s current motor fuels tax burden is low (46th in the nation); The average Missouri driver would only pay an additional $5 per month if the motor fuels tax was increased; and, Even with this modest increase, Missouri would remain competitive with its neighboring states.

"The Task Force further recommends that the General Assembly consider adjusting or indexing the flat gasoline and diesel excise tax to account for future inflation and fuel-efficiency improvements in the light vehicle fleet . . . 20 states now index their state motor fuel tax to keep up with growing costs and inflation.
"The Task Force recognizes that, under the state’s Hancock Amendment, it will be necessary to put a proposed increase of 10 cents per gallon on gas and 12 cents per gallon on diesel to a vote of the people."

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R Stoff

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