MoDOT Funding on Decline, Transportation Tax Proposed Solution

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JEFFERSON CITY - A proposed constitutional amendment earmarking a sales tax increase for transportsrtion found it's way to the Missouri Senate Transportation Committee for the second time in as many years. 

Representative Dave Hinson, R-St. Clair, sponsored a bill proposing a 1.0 percent increase to the state's sales and use tax for a period of 10 years. Currently, the state's sales tax is placed on the retail price of goods or taxable services sold, while the use tax is imposed on the storage, use or consumption of personal property within the state. The proceeds from the additional tax would be set aside for transportation and infrastructure projects. 

"Transportation funding is on the decline," said Representative Dave Schatz, R-Sullivan, the co-sponsor of the bill. "Revenues continue to decline while the need for funding is steadily increasing."

Missouri has a 4.225 percent state sales and use tax, which is distributed into four funds to finance portions of state government:

General Revenue (3.0 percent)

Conservation (0.125 percent)

Education (1.0 percent)

Parks/Soils (0.10 percent).

This proposed amendment would add an additional 1.0 percent toward Transportation and Infrastructure.

Cities and counties may also impose additional local sales and use taxs.

The proposal adds a safeguard for Missourians, by prohibiting the increase of the motor fuel tax without voter approval during the 10-year lifespan of the transportation tax. 

"Missouri needs to find a funding mechanism that is more stable than relying on the fuel tax," Schatz said. "There is a great need for this funding, it's one of the key economic decisions a government can make."

MoDOT estimates spending $456 million this year just to maintain Missouri's transportation system. That includes keeping highways, bridges, roadsides and rest areas in good condition. Road striping, snow removal, mowing, litter removal and traffic management are also included in the anticipated costs.

Schatz says he expects statewide funding for transportation and infrastructure to be as low as $325 million by 2017.

Since the proposed resolution is a constitutional amendment, if it passes the legislature it must be voted on in November's general election.

The issue would raise an estimated $800 million annually, or roughly $8 billion over it's 10-year span. 

Of this $800 million, 5.0 percent of the proceeds would be divided among the state's counties based on the county road mileage and assessed rural land value. Another 5.0 percent would go toward cities, towns, and villages based on population ratios. 

The remaining 90 percent would belong to a newly created Transportation Safety and Job Creation Fund. The Highways and Transportation Commission within the Department of Transportation would control the account and could use the money for state highway and transportation systems.

This resolution made it's way through the House twice and the Senate once last year, it was eventually blocked by a Republican filibuster from senators who opposed tax hikes.