Missouri Senate discusses fuel tax rate

The annual pursuit at the Missouri statehouse to come up with a long-term plan to fund the state’s roads and bridges is again centered on a possible fuel tax increase.

Missouri’s 17-cent fuel tax rate has remained unchanged since 1996.

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.

Fuel tax bill gets boost

Missouri raised $717 million in fuel tax revenue during fiscal year 2019 – about $13 million less than the previous year.

In an effort to eat into the widening funding gap, the Senate Transportation, Infrastructure and Public Safety Committee voted to advance a bill to initially raise nearly $130 million annually for state and local roads. The bill has since received initial consideration on the Senate floor.

Sponsored by Sen. Doug Libla, R-Popular Bluff, SB539 would increase the gas tax 2 cents from 17 cents to 19 cents. The diesel rate would be increased 6 cents from 17 cents to 23 cents.

The tax rates would also be adjusted annually for inflation via the consumer price index. Over the next six years the gas rate would increase an additional 2.4 cents to 21.4 cents. The diesel rate would climb 2.9 cents to 25.9 cents over the same time.

According to a fiscal note attached to the bill, fuel tax revenues would raise an additional $236.9 million per year by 2027.

The state would continue to collect 73% of fuel revenue. Cities receive 15% and counties collect 12%.

Recent funding pursuits

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 $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.

Fuel tax increase is the best option

Libla questions how much longer state lawmakers are going to wait before getting a deal done to support infrastructure.

“How in the world can we expect to have 21st century roads and bridges with 1996 revenue? We can’t,” Libla said while speaking on the Senate floor.

He added that the fuel tax is the best way to address the state’s ongoing funding shortfall.

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

Libla said the Legislature has a fiscal responsibility to take care of the state’s assets.

“Have you ever heard the term ‘penny-wise and a pound-foolish?’ Well this takes care of that. We don’t need to be penny-wise and a pound-foolish any longer. People who use these roads need to help pay for them.

House bill alternatives to fuel tax increases

Other bills introduced in the House also would raise fuel tax rates.

The legislation would raise gas and diesel rates between one penny and a dime per gallon.

One bill introduced in the House would impose a modest tax increase.

The bills have not been forward to any committees.

More Land Line coverage of news from Missouri is available.