Missouri's 'diversion' funds down 8.3 percent

Thursday, August 11, 2005

Amendment 3 bolsters MoDOT's coffers mostly by pulling money from general revenue.

JEFFERSON CITY, Mo. -- When Missouri voters overwhelmingly approved Amendment 3 last year, they were promised it would "end the diversion" of highway money to agencies other than the Missouri Department of Transportation.

Under the state budget for the current fiscal year, however, the so-called diversion was reduced by only 8.3 percent from the previous year.

For the fiscal year that began July 1, lawmakers appropriated $190.6 million in highway user fees, such as fuel tax and vehicle and driver license revenue, for other state agencies. In the last budget enacted prior to the passage of Amendment 3 last November, that amount was $207.8 million.

Although widely used by groups advocating more highway spending, the term "diversion" has always been a misnomer because it implies road funds are being misused. Both before and after voters ratified Amendment 3, the Missouri Constitution has earmarked some of that revenue for the Missouri State Highway Patrol and the Department of Revenue.

However, the amendment did cap the amount the revenue department can receive at 3 percent of highway user fee collections. That contributed to a more than two-thirds reduction of the agency's share from the road fund, which now stands at $15.2 million.

State budget director Larry Schepker said much of the savings at the revenue department was achieved by converting the 11 state-run license bureaus to privately operated fee offices.

"We had to come up with extra general revenue to replace the highway funds as a result of Amendment 3," Schepker said. "One way to do that was to close the branch offices and avoid their costs."

The highway patrol's share of road money increased by $11.8 million for a total of $153.2 million. Another $22.2 million from the road fund passes through the state Office of Administration for patrol and revenue department employee fringe benefits and leasing and capital improvement costs at the patrol.

The minimal impact on the so-called diversion, however, doesn't mean Amendment 3 hasn't been a boon for MoDOT. Another provision that was downplayed by supporters during the ratification campaign provides the primary revenue source for shoring up highway spending.

That provision redirects to MoDOT revenue from a portion of the sales tax on motor vehicles that previously had gone to fund general state services such as education and health care. For the current fiscal year, that means an additional $30 million for MoDOT. Over the next three years, an additional $90 million will be permanently transferred from general revenue to the road fund.

By the time the phase-in is complete, an estimated $120 million a year used for general state services will instead fund road construction.

House Budget chairman Brad Lager, R-Maryville, said the first bite Amendment 3 took out of general revenue added a degree of difficulty to the appropriations process because lawmakers had to find corresponding savings to offset the loss. The continuing implementation of the measure shouldn't prove problematic, he said, as rebounding state revenue collections are expected to fill the gap.

"This provides some certainty that allows us to plan for it," Lager said.

mpowers@semissourian.com

(573) 635-4608

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