Missouri Lawmakers Pass Fuel Tax Hike With Refund Option

Light traffic in downtown St. Louis in March of 2020 when the pandemic hit
Light traffic in downtown St. Louis in March of 2020 when the pandemic hit. (Jeff Roberson/Associated Press)

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JEFFERSON CITY, Mo. — Missouri drivers will likely pay more at the pump starting this fall after lawmakers passed a bill to raise the state’s fuel tax for the first time in more than two decades.

The measure, sent to Gov. Mike Parson’s desk late May 11, would add 2.5 cents to the current 17-cent-per-gallon fuel tax beginning in October to pay for road and bridge repairs. It would rise over the next five years to a 12.5-cent-per-gallon hike.

The bill passed the House 104-52 after surviving a number of attempted amendments by conservative Republicans that would have effectively scuttled the legislation with three days left in the session.

Voters in recent years have rejected gas tax increases at the ballot box, most recently in 2018. The bill allows drivers to opt out by applying for a refund, supported by receipts.

Proponents of the hike have long bemoaned the state’s highway and bridge repair needs. In 2019, the Missouri Department of Transportation reported $825 million in annual unfunded “high-priority” improvements.

Missouri’s fuel tax rate is 17 cents a gallon for all motor fuel, including gasoline, diesel, kerosene, gasohol, ethanol blended with gasoline, biodiesel (B100) blended with clear diesel fuel, etc. Missouri’s fuel tax is the second-lowest in the nation, according to the Tax Foundation, but it has the seventh-largest highway system and the sixth-most bridges. Kansas’ tax is 24 cents per gallon for gasoline and 26 cents for diesel.

The bill would raise up to $514 million annually by 2027 for repairs by MoDOT and local governments. It’s not clear how many would seek the refund. In South Carolina, 79,000 claimed a total of $3.4 million in gas tax refunds in 2020, 4% of what was available.

“If you do not want to invest in our roads and bridges, you do not want to pay those extra taxes, then you have the option of getting that rebate and taking your money back,” said House Transportation Chairman Becky Ruth, a Festus Republican. “I don’t know of any other tax that you can get 100% of your money back.”

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