Transportation Sales Tax Could Provide Needed Revenue, Official Says - The Missourian: State News

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Transportation Sales Tax Could Provide Needed Revenue, Official Says

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Posted: Saturday, February 8, 2014 4:00 pm

Missouri’s top transportation official warned a House committee Tuesday that the failure to pass a proposed penny increase in the state’s sales tax for highway funding could compromise road safety and cause slow economic growth, according to The Associated Press.

The House Transportation Committee held a public hearing on the measure that would go before voters in November if passed by the Legislature. Dave Nichols, director of the Missouri Department of Transportation, said the agency would have to go without necessary bridge and road repairs in the coming years if it does not receive additional funding.

“It is going to deteriorate unless we come up with something,” Nichols said. “We are not going to be able to afford what Missourians desire in their transportation system.”

Presiding Franklin County Commissioner John Griesheimer said he thinks there is enough support in the Legislature to put the transportation tax on the ballot for the public to decide.

Local officials have said the tax could generate revenue to possibly pay for a widening of Highway 47 between Washington and St. Clair.

Without the transportation tax, there appears to be few other funding options for the widening project.

Griesheimer noted that MoDOT is facing revenue shortages.

“Obviously, we’re in a real funding crisis,” said Griesheimer, who sits on the Board of Directors of the East-West Gateway Council of Governments, the regional transportation and planning agency.

Right now local officials are in a “wait and see period” to see if the public will be given a chance to vote on the 1-cent transportation sales tax, Griesheimer added.

Supporters of the 1-cent sales tax have also filed an initiative petition, but have not started gathering signatures in hopes the Legislature will refer the plan to the ballot this year, the AP reported. A similar measure cleared both the House and Senate but failed to win final passage in the waning days of last year’s legislative session.

Funding Crunch

Over the past five years, Missouri’s construction budget for roads and bridges has fallen from about $1.3 billion annually to $685 million this year. It is projected to dip to $325 million by the 2017 budget, according to Nichols. He said it takes $485 million per year just to maintain the state’s roads in their current condition.

The funding crunch has caused the department to quit taking applications for a local cost-share program that has helped speed up the construction of highway projects and to stop adding major new projects to its five-year construction plan, the AP reported.

A parade of lobbyists for business groups and associations testified in support of the legislation, arguing it would improve the state’s infrastructure and job climate. Supporters said a sales tax increase was more likely to earn voter approval than alternative funding sources, such as an increase in the gas tax.

“There are many ways to skin a cat,” said committee chairman Rep. Dave Schatz, R-Sullivan. “But this mechanism is one that we believe people have looked at and has been successful.”

Opponents countered that a sales tax increase would disproportionately affect low-income residents. Jeanette Mott Oxford, the executive director of the Missouri Association of Social Welfare and a former Democratic House member, said the Legislature should look at a fuel tax increase or a change in the state’s tax brackets to reflect higher incomes.

“We all need a highway system that works. However, there are funding mechanisms that are fairer than this,” she said.

Bill

This year’s bill is largely the same as last year’s legislation. The tax would need to be approved again by voters after 10 years to remain in effect, and voter approval would be needed to change the gas tax rate or place tolls on existing roads and bridges. The tax increase would not affect food or medicine.

Like last year, 10 percent of funds raised by the tax would also go toward local transportation projects. But this year’s version would allow cities to earmark a portion of those local funds to other forms of transportation, including air, rail, bicycle and pedestrian projects. Officials from the city of St. Louis told committee members that they would like to see that amount increased to reflect the changing transportation patterns of the city.

“This is the time to take a hard look and begin to think about how we can better channel some of those dollars,” said Lewis Reed, president of the St. Louis Board of Aldermen.

The House committee did not vote on the proposal Tuesday. Sponsoring Rep. Dave Hinson, R-St. Clair, said he expected the House to vote on the measure in April, the AP reported.

State transportation officials have long been forecasting a decline in available construction dollars due to a variety of factors. A bond-financed surge in construction during the last decade has now dropped off while the payments continue. Federal highway funding has become more uncertain. Fuel taxes have flattened out, partly because of more fuel-efficient vehicles. And construction costs have risen for materials such as concrete, asphalt and steel, according to the AP.

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