Missouri Senate Transportation Chairman Hopeful About Fuel-Tax Hike

Missouri’s 17-cent tax for both gas and diesel is among the lowest of any state and barely half of the nationwide average.

Under state law, any tax increase of at least $90 million has to be approved by the voters. So it’s no wonder that Missouri hasn’t raised its fuel tax since 1996. And, of course, 2016 is an election year which usually makes legislators leery of voting for any tax hike.

However, state Sen. Doug Libla, who became chairman of the transportation committee last year, remains undaunted. Libla, who failed to get a three-year, graduated 6-cent increase passed in 2015, will try again when the Senate reconvenes Jan. 6. Libla’s current plan, which was altered by a filibuster last session by opponents who wanted trucks to pay more than cars, would raise the price of diesel 3.5 cents per gallon and the price of gas by 1.5 cents per gallon, low enough to stay below that $90 million threshold.

“How does anybody expect Missouri’s Department of Transportation to build and maintain roads with 20th-century funding at a 21st-century cost?,” Libla told Transport Topics. “If there are legislators who are concerned about getting re-elected versus doing the right thing, I think that’s going to be apparent. They can put their heads in the sand if they want, but the need’s out there. This is not a new tax. This is an adjustment to a tax we’ve had since 1924.”

Under terms of that nearly-century-old tax, 30% of the revenue goes to cities and counties, leaving 70% for MODOT. In 1996, those 17 cents per gallon were thus divided with 11.9 going to MODOT and 5.1 to cities and counties. Two decades later, according to Libla, those 17 cents are worth 8 cents with 5.4 going to MODOT. That’s a 55% reduction.

Tom Crawford, president of the Missouri Trucking Association, said that while his organization favors a fuel-tax increase to boost transportation funding, it doesn’t support diesel being taxed at a higher rate than gas.

But Gov. Jay Nixon has proclaimed his support for Libla’s bill, telling The St. Louis Post-Dispatch, “We’re going to need to start making a down payment on the future transportation needs of the state.”

Libla said that he and House Transportation Chairman Glen Kolkmeyer are “on the same page.” Crawford noted that new Missouri House Speaker Todd Richardson and new President Pro Tem of the Senate Ron Richard have expressed a willingness to consider a fuel-tax increase.

“I’m hopeful that we can do something in the Legislature,” Crawford said. “We have a unique situation in Missouri because of the constitutional provision that prohibits the Legislature from raising revenues above a certain amount. It’s a challenging environment. Our infrastructure’s in decent shape, but those of us that work in transportation see what’s coming. We see the rise in freight traffic. We’re past time to get something done. This stuff doesn’t get built overnight.”

For those who think that MODT should just cut costs, Libla noted that the department has shaved $600 million from its budget over the past five years with major workforce reductions, closures of many facilities and offices, and the sale of excess equipment. And yet, as MODT spokesman Bob Brendel said, the department still faces a shortfall of about $160 million as it hopes to rebuild and expand 200 miles of Interstate 70, the state’s major east-west highway, revamp I-44, its major north-south freight corridor, and fix its 641 structurally deficient bridges.

But as Libla said, Missouri wouldn’t be in this jam if not for the lack of foresight when the last fuel-tax increase was passed.

“If we had done 2-plus-2-plus-2 [three-year, graduated fuel-tax increase] with indexing back in 1992, we wouldn’t be having this conversation and Missouri would have really nice roads, highways and bridges,” Libla said. “The fuel tax would be around 24-25 cents a gallon, which is where we need to be to meet our 21st-century needs.”