Missouri lawmakers consider bills for a fuel tax increase

December 7, 2020

Keith Goble

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About a month remains until the Missouri General Assembly convenes for the 2021 regular session. In the weeks leading up to the start date, multiple legislators are taking steps to enact a fuel tax increase.

For years elected officials in the Show-Me State have touted the need to come up with a long-term funding plan to help the state complete road and bridge projects. The state’s 17-cent fuel tax rate has remained unchanged since the mid-1990s.

The state’s Department of Transportation has said there is an $825 million gap in annual road and bridge funding. Transportation officials say a dire situation to fund road and bridge work will only worsen until legislators get a deal done.

Progress hard to achieve

Despite the understanding that more money is needed, nothing significant has been accomplished.

In November 2018, voters rejected a question to raise Missouri’s 17-cent fuel tax by 10 cents over four years. The tax increase would have raised another $437 million annually.

Some progress was made during the 2019 regular session. Legislators approved $301 million in borrowing to pay for construction and repair of 215 bridges on the state highway system.

During the 2020 regular session, the Senate Transportation, Infrastructure and Public Safety Committee approved a bill to increase the gas tax by 2 cents to 19 cents. The bill also called for raising the diesel rate by six cents to 23 cents.

Additionally, the tax rates would be adjusted annually for inflation via the consumer price index.

The full Senate, however, did not bring the bill up for a vote.

Fuel tax needs boost

Missouri raised $717 million in fuel tax revenue during fiscal year 2019 – about $13 million less than the previous year. The figures are expected to be down again, largely due to disruptions from the pandemic.

In a renewed effort to bolster tax revenue, Senate President Dave Schatz, R-Sullivan, is behind legislation to raise the gas and diesel rate by 10 cents to 27 cents per gallon.

The increase would be phased in over five years. Starting July 1, the tax would be increased by 2 cents annually through 2025.

Voters would make the final decision on the issue in a statewide referendum.

There is no indexing component in the bill – SB262.

A proposed amendment to the state’s constitution has also been introduced by Schatz. Passage of SJR21 would formally put the tax question on ballots throughout the state.

One House bill calls for the same rate increase.

Sponsored by Rep. Steve Butz, D-St. Louis, HB114 would increase the fuel tax on Jan. 1, 2022. The rate would be increased by 2 cents annually through 2026.

The bills await assignment to committee for the regular session that begins Jan. 6.

Fuel tax increase touted as preferred option

Supporters say the fuel tax is the best way to address the state’s ongoing funding shortfall.

Outgoing Sen. Doug Libla, R-Poplar Bluff, was behind the failed 2020 fuel tax increase bill.

“Handicapping our highway system just blows my mind. … What more fair way can you do it?” he told legislators at the time. “A user-based fee is the best system because users are paying for it.”

The Owner-Operator Independent Drivers Association says a fuel tax increase would make the most sense to raise transportation revenue in the Show-Me State.

The truckers’ group added that the state must act now to make improvements to avoid massive expenses later.

More Land Line coverage of news from Missouri is available.

 

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Keith Goble

Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.