United States

Schatz: Missouri gas tax hike long overdue, vital for post-pandemic recovery

(The Center Square) — Missouri has the nation’s seventh-largest road system but ranks 45th in road funding, according to Missouri Senate President Dave Schatz, who has filed a bill proposing to increase the state’s gas tax for the first time since 1996.

“As our factories, farmers and small business owners begin to recover from the impact of the pandemic, we must do everything we can to ensure our state has a safe and effective system of roads and bridges,” Schatz wrote in a widely-published Wednesday op-ed. “In my opinion, our state cannot reach its true economic potential without a vibrant and robust transportation infrastructure.”

Schatz, R-Sullivan, has filed Senate Bill 262, which would increase the state’s motor fuels tax by 2 cents annually beginning July 1, 2021, for five years until it is 27-cents-per-gallon in 2026. Rep. Steve Butz, D-St. Louis, has introduced a similar proposal, House Bill 114, in the House.

If adopted, by state law the measures must be approved by voters in a referendum. In 2017 and 2018, lawmakers approved legislation to increase gas taxes, but both were rejected by voters.

Schatz’s Senate Joint Resolution 21 proposes to present voters with a third ballot measure in seven years seeking to raise Missouri’s 17 cents a gallon gas tax, unchanged for a quarter century and the nation’s second-lowest behind only Alaska’s 14 cents per-gallon tax.

Neither bills have been assigned to committees. The legislative session began Jan. 6 in Jefferson City and is scheduled to continue into May.

Schatz said Missouri cannot afford to sustain its 17 cent per-gallon tax, which the Missouri Department of Transportation (MoDOT) maintains only has the purchasing power of 6-cents-per-gallon.

Missouri’s 33,800 miles of roads is the nation’s seventh largest while, “unfortunately, our state ranks 45th nationally in funding our roads and bridges,” Schatz writes.

Missouri drivers lose an estimated $8 billion annually in lost productivity and automobile operating costs because of the poor road conditions, according to TRIP, a Washington, D.C., research nonprofit.

“Due to inadequate state and local funding, 52 percent of major roads and highways in Missouri are in poor or mediocre condition,” TRIP’s December 2020 report said, noting “driving on rough roads costs the average Missouri driver” from $1,514 a year each in the Columbia-Jefferson City area to $1,917 each annually in the St. Louis area.

Show-Me Institute analyst Jakob Puckett in Jan 8 commentary said MoDOT estimates $745 million in road projects go unfunded annually, noting “many states have found ways to keep their gas taxes in line with changing times” without requiring lawmakers adopt legislation or voters approve ballot measures.

“For instance, numerous states have indexed their gas taxes to inflation to keep gas tax levels in step with the rest of the economy,” he writes, adding North Carolina’s gas tax is indexed to the state’s population, Nebraska’s gas tax is adjusted in accordance with the state transportation budget and Georgia’s is indexed to vehicle fuel efficiency.

“In other states gas tax increases are revenue neutral, a point which is worthy of consideration, especially this year,” he writes. “South Carolina is in the process of increasing its fuel tax in 2-cents-per-gallon increments over six years. However, residents can write off the extra gas taxes paid at the pump from their income taxes. This essentially restructures where the taxes go, as residents don’t necessarily pay more taxes, but more of the taxes they pay go toward transportation.”

Missouri lawmakers should consider these options, Puckett said.

“While gas taxes are not a perfect solution … they are one option,” he wrote. “As evidenced by other states, Missouri policymakers have options as to how to approach this problem.”

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