Voters to decide on fuels tax increase

Published 11 October 2018

Missouri's tax on motor fuels has been 17 cents a gallon since 1996.

Voters on Nov. 6 are being asked to raise that tax by a dime, phased in over a four-year period, with 2.5-cent increases each year.

Lawmakers placed the issue on the ballot — and the state courts said a legal challenge was premature, to the Legislature's process for passing the proposed fuels tax increase and asking voters to approve it.

Lawmakers also wrote the question voters will see on the ballot: "Shall Missouri law be amended to fund Missouri state law enforcement by increasing the motor fuel tax by two and one half cents per gallon annually for four years beginning July 1, 2019, exempt Special Olympic, Paralympic, and Olympic prizes from state taxes, and to establish the Emergency State Freight Bottleneck Fund?"

The proposed law says money generated by the additional taxes — if voters approve them — will be directed to the Highway Patrol and its operations, to be "used for the actual cost of the state highway patrol in administering and enforcing any state motor vehicle laws and traffic regulations."

Supporters say the proposed tax increase will provide more than $400 million a year in additional money for road and bridge improvements — and the two claims have some voters confused or concerned.

But both claims are true.

Highway Patrol funding

State law now requires the Missouri Highways and Transportation Department to pay the Highway Patrol for "all expenses of members of the patrol and all expenditures for vehicles, equipment, arms, ammunition, supplies and all other expenditures for the operation and maintenance of the patrol in the enforcement of any state motor vehicle law or in the regulation of traffic on highways maintained and constructed by the state highways and transportation commission."

Capt. John Hotz, head of the patrol's public information office, noted: "Funds received into the highway fund come from the motor fuel tax, as well as motor vehicle registration, driver's license, and other fees."

Hotz told the News Tribune last week that $254,247,164 was appropriated in the budget for the current state business year — July 1, 2018-June 30, 2019.

That money, from the state road fund, is for the "actual cost of the state highway patrol in administering and enforcing any state motor vehicle laws and traffic regulations," he said.

The patrol also gets money from the state's general revenue fund for its non-highways-related work, including operations such as the Division of Drug and Crime Control, which helps local officials with criminal investigations, as well as doing its own investigations; the Water Division (which is the former state Water Patrol); maintaining the statewide Sex Offender Registry; and running the Crime Labs, which process evidence for law agencies throughout the state.

Hotz said the patrol is set to get $35,829,979 for its general revenue-funded operations during the current business year.

The proposed new law wouldn't change any of that.

If passed, it just would designate that most of the "new" money from the increased fuels tax would flow to the Highway Patrol.

That plan would mean the portion of MoDOT's budget that now is paying for the patrol operations would be shifted to pay for road and bridge construction, repair and maintenance — providing about $288 million more than MoDOT currently can direct to roads and bridges.

If the fuels tax is increased, the state auditor's fiscal note says the increased tax will "generate at least $288 million annually to the State Road Fund to provide for the funding of Missouri state law enforcement and $123 million annually to local governments for road construction and maintenance."

That allocation to local governments also isn't new.

Missouri's Constitution currently directs that 15 percent of money in the road fund go to the state's 114 counties and the City of St. Louis, and sends another 15 percent "to the various incorporated cities, towns and villages within the state" for road-building and maintenance.

Raising the fuels tax automatically would increase the state's contribution to the counties and cities — and the dime increase would be about a 66 percent increase over what the cities and counties get now.

Possible local impacts of tax increase

On its website, the SaferMO.com organization — which is supporting the proposed tax increase and running the campaign for it — offers a link showing the estimated benefit for Missouri counties and many of its cities.

For example, the campaign's chart shows Cole County getting a total of $1,381,419 more each year after the 10-cent tax increase is fully phased-in.

Of that amount, Cole County government's share would be $624,629, while the cities would split $756,790.

Jefferson City would receive $677,594 and Wardsville, $23,688.

St. Martins would see $17,931 additional; Taos $13,810; and Russellville would get $12,693.

Centertown, St. Thomas and Lohman also would receive funds.

Similarly, Callaway County would get $879,677 for its road and bridge operations, while the cities would split $288,660.

Of that, Fulton would see $201,175; Holts Summit, $51,072 (and Lake Mykee, still listed separately in the funding list, even though it merged with Holts Summit last year, would get an additional $5,505).

Money also would be distributed to Auxvasse, New Bloomfield, Mokane and Kingdom City.

And Moniteau County would get $303,856, while the county's cities would share $130,441, with California receiving $67,289, Tipton $51,308, Jamestown $6,071, Clarksburg $5,254, and Lupus $519.

While SaferMO.com is backing the proposed law change, no organized opposition has announced itself.

The Missouri Petroleum Marketers and Convenience Stores Association had challenged previous proposals for increasing Missouri's fuels tax.

But, Executive Director Ron Leone said last week, the MPCA "is neutral on Prop D. Of course, our individual members can support Prop D if they so choose."

Scott Charton, SaferMO.com's spokesman, told a Jefferson City news conference last week that inflation is one reason to support the fuel tax increase.

"The state last raised its fuel tax 22 years ago," he said. "That inflation over 22 years means that 17 cents is worth 7 cents today.

"Over that 22 years, that 17 cents fuel tax lost 60 percent of its value" in terms of its buying power.

Additionally, he said, while Missouri has the nation's seventh largest state-owned road system, and the sixth largest number of bridges, "We're 49th in the state motor fuel tax."

When fully implemented in 2022, Charton said, the increased tax will cost the average Missourian about $5 a month, "a very small investment that will bring us billions (more) in federal money that we can leverage to put on roads and bridges."

At a MoDOT Planning Meeting on Tuesday in Jefferson City — designed to discuss the department's current financial condition and how increased revenues might help it — Director Patrick McKenna also said inflation has hurt the department's ability to build or do basic maintenance.

"We cannot build what we don't have the money to build," he explained. "We cannot reconstruct what we don't have the money to reconstruct.

"That's the central issue, here."

Other provisions

While the main focus of the proposed law is more money for roads and bridges, and a dedicated money stream for the Highway Patrol, the measure has some other provisions, as well.

It raises the state's tax on other fuels from their current levels to the same, 27 cents, as gasoline and diesel fuel will have.

The other fuels affected, as listed in the law, are:

Compressed natural gas, currently 5 cents per gasoline, increased to 27 cents after Dec. 31, 2025.

Liquefied natural gas, currently 5 cents per gasoline, increased to 27 cents after Dec. 31, 2025.

Propane, currently 5 cents per gasoline, increased to 27 cents after Dec. 31, 2025.

The law also would require the state auditor to audit the funds and provide a report to the General Assembly every other year, "to ensure that the revenues generated by this section are used for their designated purposes."

The proposed law allows that audit and report to "be included as part of an audit of a department or agency receiving such funds."

The measure also protects from income taxes "any prize or award won by a taxpayer in athletic competition in the Olympic, Paralympic, or Special Olympic Games."

And the proposal creates an "Emergency State Freight Bottleneck Fund," with money from general revenue — not the fuels tax — to pay for repairs or improvements to roads that have "an estimated construction cost of $50 million dollars or more;" are "needed to eliminate a bottleneck, a 20-minute delay or more during peak hours, that impacts the distribution of goods and on-time delivery of freight;" are needed "to reduce fatal and disabling motor vehicle crashes within an area designated as a safe travel zone" by MoDOT; and be listed on the already prepared 2014 state freight plan.

Also to be eligible, the project would "receive not less than 35 percent of the funds required for project completion from sources other than the state road fund or general revenue."