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Missouri Policymakers Sending Gas Tax Increase Prop to Nov. Ballot

in Homepage Primary/Opinion

By Kerry Smith, Editor – St. Louis Construction News & Review Magazine

Despite a session wrought with issues related to the state’s former chief executive, Missouri legislators concluded the regular session with a measure asking for a 2.5-cent increase in Missouri’s portion of the motor fuels tax.

Missouri Chamber of Commerce and Industry President Dan Mehan said transportation infrastructure funding policy jelled in the final days of the 2018 state legislative session.

“With two weeks left, nobody thought it was going to happen. With two days left, nobody thought it was going to happen,” said Mehan. “We ended up sending to the voters for this November a proposition that will ask for a 2.5-cent gas tax increase for each year over the next four years. Missouri currently pays 17 cents, so we’ll add 2.5 cents to that every year beginning in 2019 if voters approve it on November 6th. We’re very pleased with the outcome.”

The state has not seen a motor fuels tax increase since the 1990s, Mehan said, and it is sorely needed to maintain Missouri’s transportation infrastructure. Since that timeframe, 39 states have elected to raise their own state motor fuels user fees. If November’s proposition passes muster with Missouri voters, the state is projected to generate $240 million annually for the next four years to help fund roads, bridges and more.

“We’ve got the second- and third-largest rail terminals in the U.S. and the seventh-longest highway system in the U.S.,” Mehan said, “yet we’re 47th in the U.S. when it comes to transportation funding. That doesn’t make sense. For Missouri businesses, we view infrastructure as an asset that we need to invest in and continually make better.”

Mehan and others – including the U.S. Chamber of Commerce and the Associated General Contractors of America – agree that the motor fuels funding mechanism has to change in order for federal dollars, which comprise the bulk of the fuel tax, to keep pace with the need for new and improved roads, bridges, rail and mass transit nationwide.

In January, the U.S. Chamber proposed a 25-cent increase to the federal portion of the motor fuels tax. President Donald Trump endorsed the proposal a month later.

According to the U.S. Chamber, inflation has eroded nearly 40 percent of the value of the user fee since it was last raised in 1993. Continual improvement in fuel efficiency equates to more drivers driving vehicles more on less fuel. The federal Highway Trust Fund, the fund fed by 18.4 cents per gallon of gas and 24.4 cents per gallon of diesel fuel, is in the red and projected to become insolvent within the next two years. Fixing America’s Surface Transportation Act (known as the FAST Act), a four-year transportation infrastructure-funding program, will expire in 2020; a portion of that act has been propping up the long-ailing Highway Trust Fund.

Sean O’Neill, vice president of congressional relations for the Associated General Contractors of America, said the AGC and its fellow stakeholders stand in support of the U.S. Chamber’s proposed 25-cent increase.

“We see an increase in the motor fuels tax to be the answer, at least in the short term, to address the long-term solvency of the Highway Trust Fund,” O’Neill said. “We understand that it has some political hurdles to get over, but we see a gas tax to be the most efficient way to do what we need to do to invest in our aging transportation infrastructure. Since 2013, at least 26 states have increased taxes or fees dedicated to funding infrastructure. States – Missouri among them – are doing what they can do, but it’s up to the federal government to make sure the funding mechanisms are relevant as fuel efficiency continues to increase.”

In Illinois, a proposal is afoot to more than double that state’s portion of the motor fuels tax. The Illinois Economic Policy Institute is recommending a hefty increase from the current 34 cents to 85 cents. The measure has met with fierce resistance from organizations including the national Tax Foundation.

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