In this final week of the Missouri Legislature’s regular session, a proposed gas tax hike is expected to jump into the driver’s seat.
The House of Representatives is planning to work on a bill that would gradually raise the user fee by 12.5 total cents over five years. Senate President Dave Schatz, R-Sullivan, is proposing the legislation that includes a rebate option for most drivers who do not want to pay for the amount of the increase.
Another provision would increase annual fees on electric vehicles by 20% per year over a five-year period. The plan would also create a task force to study the impact electric vehicles have on the state’s transportation funding.
The state House Rules Committee voted 7-4 on Friday to advance the measure. A fiscal review committee is taking a look at the proposal today.
Missouri’s fuel tax of 17 cents per gallon has not been increased since 1996, despite having the 7th largest highway system in the nation. Alaska is the only state with a lower gas tax – with an eight-cent-per-gallon rate.
MoDOT’s current fuel tax rate generated about $692 million in 2020. Schatz’s bill is projected to raise an extra $500 million annually to put toward maintaining Missouri’s roads and bridges.
Gov. Mike Parson has voiced support for Schatz’s proposal. Many lawmakers agree the state’s infrastructure funding must be increased but they butt heads on the approach to take.
In 2002, 2014, and 2018, Missouri voters opposed ballot measures that would have increased funding to help with the state’s highway needs.
Jeff Glenn is the executive director of a statewide group called Missourians For Transportation Investment. The Cape Girardeau-based organization, founded in 2015, promotes adequate investment in the state’s transportation system. It is made up of a broad coalition of trades groups, local chambers of commerce, engineers, agriculture groups, and more.
Glenn tells Missourinet an increase in funding for the state’s highway system goes way beyond the contractors, the engineering firms, and the trades workers.
“Transportation infrastructure is one of the most important decision points for businesses as they think about relocating or expanding. It’s important for us to have adequate roads and bridges so that we can support, not just the transportation industry, but our entire economy. Our road and bridge system really is the backbone of Missouri’s economy,” he says.
Glenn says Missouri desperately needs to boost its highway funding in every region of the state.
“When every area of the state has projects that they can’t do because there’s not enough funding, it’s really not a problem of how the pie gets divided. It’s that we don’t have a big enough pie. So, that’s one of the things we hope we can accomplish. If Senate Bill 262 is passed, is to be able to bake that bigger pie,” says Glenn.
He says when the bill is fully phased in, the average passenger car driver traveling 12,000 miles annually would pay an extra $70 per year.
“If they don’t want to pay that, all they have to do is submit that refund claim and their increase would be zero,” says Glenn. “When you think about that and you think about the average passenger vehicle, around $70 per year, you are looking at around $6 per month is what the additional motor fuel tax costs the average driver to be able to drive on better roads and better bridges.”
For pickups, he says the average increase would be less than $100 annually.
Some arguments opposing a fuel tax increase include Missourians are taxed enough as it is and the state Transportation Department needs to do a better job of being efficient.
“Believe me, I don’t like paying taxes any more than anybody else does. But I do know that there are certain government functions that have to be government functions. And so, you have to collect taxes for those functions. You’re not going to have private people going out and building roads and bridges. Government has to do that,” he says. “For those who don’t want to invest in the state transportation system, they have that option to be able to claim that refund.”
Glenn says the Missouri Department of Transportation (MoDOT) has been recognized as one of the most efficient transportation agencies in the nation.
Morgan Mundell, chairman of Missourians for Transportation Investment, says like Missouri’s roads and bridges, the ability for the state to fund maintenance and repair of transportation infrastructure is deteriorating.
“With the last gas tax being signed by then Governor John Ashcroft in 1992, inflation has eroded away the ability to maintain one of our state’s most vital assets. Our roads and bridges take us to work, help bus our children to school, move our farmer’s products to market and provide the foundation which Missouri’s economy is based on. This week the Missouri House will take up SB262, which is designed to provide a long term solution to this problem. We urge the Missouri House of Representatives to pass SB262 and help Missouri prepare for the future for the safety and security of our families and economy,” Mundell said in a statement.
Another supporter of a fuel tax increase is the Missouri Trucking Association. The organization represents roughly 600 member companies, both big and small.
President and CEO Tom Crawford tells Missourinet although MoDOT has one of the most efficient transportation departments in the country, he says the agency is fighting a losing battle without proper highway funding.
Crawford says his members wholeheartedly support an increase, even though most of them won’t qualify for a rebate.
“Try to track a super load journey that starts or ends in Missouri and see how they get where they need to get to,” says Crawford. “It is a challenge and it is a challenge that has gotten worse – not better – over the last 20 years. The infrastructure is just failing us and we haven’t made the investments to keep up with it.”
He cites the weighted state average fuel tax rate being 19 cents per gallon in 1997 – just one year after Missouri’s gas tax increased to 17 cents per gallon. Today, the weighted state average fuel tax rate has climbed to nearly 37 cents, even though Missouri’s fuel tax remains at 17 cents per gallon.
Another part of the problem for the trucking industry is the amount of time wasted taking detours due to bridge weight limits and being stuck in traffic congestion. In 2016, America’s truckers experienced nearly 1.2 billion hours of delay on the National Highway System as a result of traffic congestion. According to the American Transportation Research Institute, this delay is the equivalent of 425,533 commercial truck drivers sitting idle for an entire working year.
“The lack of funding and the situation that we find ourselves in in Missouri is very impactful to, not only the trucking industry and our ability to serve our communities in Missouri, over 70% percent of which rely exclusively on trucks to get their goods delivered to them,” he says. “So, the lack of infrastructure funding in Missouri, the challenges that we face trying to deliver those goods to those communities, on infrastructure that causes congestion, that causes delays, causes re-routing and things like that, the list goes on and on.”
The government and trucking industry made an agreement in the 1980s to create the International Fuel Tax Agreement (IFTA). That agreement means truckers in all the lower 48 U.S. states and 10 Canadian provinces owe state fuel tax based on the number of miles they drive in each state – not how much fuel they purchase in each state. When truckers fuel up, they pay into an account and settle up at the end of each quarter. But the state’s gas tax rate can put some truckers in a dilemma.
“Every other state that you’re going to is going to have a higher fuel tax requirement from you than what you’re paying in if you are just fueling up in Missouri,” says Crawford. “We’ve heard two different things. From the companies just fuel up in Missouri, they owe at the end of the quarter. When they go to settle up their account and pay the various amounts to the states that they run in, they owe additional money into their accounts. They didn’t pay enough at the pump to cover their mileage for wherever they ran.”
Crawford says due to Missouri’s low gas tax rate of 17 cents per gallon, some truckers will often bypass fueling here to ensure they don’t have to pay extra in fuel taxes.
“A lot of Missouri-based carriers are buying fuel in Illinois because of the incentive packages and because of the fact that it allows them to not have to pay more into their account at the end of the quarter,” he says. “Missouri is still getting their 17 cents, but the stuff that they are losing out on is everything else. When a truck pulls in to fuel up, it’s got a lot of extra conveniences that you don’t find at just the regular convenience store. They’ve got showers. Some of them have medical facilities. Some of them have an expanded shopping area, waiting area.”
The Senate has already passed the bill in its current form.
To view Senate Bill 262, click here.
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