Finding funding

Monday, January 14, 2008
Dennie Berger, left, Gary Patterson and Peggy O'Leary, of Park-Mark in St. Louis, painted stripes and turning marks on the nearly completed East Main Street/LaSalle Avenue Interchange Saturday, January 12, 2008, near Interstate 55. The interchange project took years in the making. A new source of transportation revenue would be necessary for future large improvement projects, such as a new Scott City interchange, say state officials. (Kit Doyle)

Editor's note: Cape Girardeau voters will select a new state representative in a special election Feb. 5. This is the first in a series of articles that will be presented in coming weeks to familiarize voters with the three candidates' stands on some of the important issues that the winner will face during the legislative session, which began Wednesday.

By Rudi Keller

Southeast Missourian

In November 2004, Missouri voters overwhelmingly approved a proposal to shift all state taxes and fees on motor vehicle sales to the Missouri Department of Transportation.

Amendment 3 transferred more than $200 million from state general revenue to the highway fund. The money was leveraged to support a $1.9 billion bond issue that paid for such major statewide projects as the Smooth Roads Initiative, which made upgrades on 2,200 miles of roads including Interstate 55 and U.S. 61 through Cape Girardeau.

But the bonds are all but spent, and state transportation officials and supporters of continued road project spending are warning that by state fiscal year 2010, the amount available to spend on roads will fall to less than $570 million, down from $1.4 billion in the year that ended June 30, 2007. That amount, MoDOT director Pete Rahn said Friday, will not be enough to maintain the state's highways in their current condition.

As a result, numerous ideas are being floated in the Missouri Legislature to add money to MoDOT's budget. The ideas range from dedicating a portion of the growth in general tax revenue to the department to asking voters for a 1 percent sales tax that would increase transportation funding by $700 million a year.

In interviews with the Southeast Missourian, none of the three candidates in the Feb. 5 special election in the 158th District Missouri House race said they are ready to ask voters for higher taxes for roads. At the same time, none of the candidates -- former state representative Mary Kasten, a Republican, former Cape Girardeau postmaster Mike Keefe, a Democrat, and pharmacist Steve Kinder, a Libertarian -- pledged to vote against asking voters for higher taxes for roads.

In fact, all three candidates offered strikingly similar positions, explaining that they hadn't studied the issue closely and would require strong proof that MoDOT's need was real and required additional revenue more than other state duties.

MoDOT's budget in the current fiscal year, which ends June 30, is $2.2 billion for all operations. The major portion of that budget is the state road fund, which combines fuel taxes, taxes and fees on motor vehicles, federal highway assistance and bond proceeds.

By 2010, there will be no more bond proceeds, Rahn said, and federal spending on highways is expected to drop dramatically as a result of deficits in the federal Highway Trust Fund.

At the same time, inflation in oil markets is squeezing the department's budget by making it more expensive to operate machinery and buy asphalt. The cost of steel and concrete is also escalating, Rahn said.

"We'll be returning to a level of construction that is pre-Amendment 3," Rahn said. "Everyone will agree that they were not pleased with Missouri roads prior to Amendment 3."

Rahn first began talking about the impending drop in spending in June at a "Transportation Summit" in Jefferson City. After that meeting, several ideas were brought forward by state lawmakers, ranging from a 1 percent sales tax tied to the completion of specific projects to a constitutional amendment allowing toll roads. Other ideas included fuel tax increases and a smaller sales tax increase to support the Missouri State Highway Patrol, freeing money spent on the patrol now for highways. Some of those proposals have already been introduced in the legislature, and others are being prepared for presentation as bills.

Without an additional source of revenue, there will be no new major road improvement projects anywhere in the state, Rahn said. "Without these other pots of money, big projects are off the table for all practical purposes. We will be doing studies, looking at where things are needed, but not adding big projects."

Cape Girardeau has been the recipient of some major road improvements in recent years. The Bill Emerson Memorial Bridge, Highway 74 and the new East Main Street/LaSalle Avenue interchange were built with a combination of federal earmarks and state road funds.

There is more to be done in the area, according to the transportation report of the Southeast Missouri Regional Planning and Economic Development Commission.

Big idea projects, such as the widening of an interstate or U.S. highway or whether to construct a new bridge over the Mississippi River, are generally preceded by lengthy public discussion and debate. Identifying smaller projects, important to local communities but not of statewide significance, is more often left to the local regional planning commissions.

For Cape Girardeau, the southeast commission report calls for a link from the Highway 74/Interstate 55 interchange to Route K and improvements to Route W in anticipation of traffic flows once LaSalle Avenue is finished.

Other transportation needs include new land for the Cape Girardeau Regional Airport to meet expansion plans and additional cargo handling capacity at the Southeast Missouri Regional Port Authority.

Duane Michie of Hayti, Mo., vice chairman of the Missouri Highways and Transportation Commission, said the planning commissions set the priorities, the highway commission totals up the needs and puts prices tags on them and it is up to politicians to either fund the requests or deny them.

"Our responsibility is to point out the need that is out there," Michie said. "It is for the legislature to offer a remedy or suggest a remedy that would be presented to voters as the solution to a shortfall for the funding of infrastructure."

Rahn and Michie said any new funding stream would have to include help for rail traffic, river ports and mass transit. Rod Reid of Shepherd Hills Factory Outlets in Lebanon, Mo., who is chairman of the advocacy group the Missouri Transportation Development Council, said it was vital that all forms of transportation receive a boost from any major source of new revenue.

The MTDC board hasn't decided which idea to support for raising money, Reid said. "We are looking at a sales tax and toll roads as the two longer-term solutions," he said. "We have spent our time trying to determine the need and then look at the economic ramifications of what happens and we have become very concerned about the need."

Reid's business, which began as the distributor of walnut bowls sold at stores along Missouri's highways, is dependent on tourism. He personally prefers a sales-tax increase over toll roads, estimating that the toll along Interstate 44 from St. Louis to the Oklahoma border could run as high as $50.

The last time taxes were increased for state road funds was in 1992. Lawmakers approved a 6-cents-per-gallon increase in fuel taxes. Kasten, a House member at the time, voted for the tax increase, which was not submitted to voters for approval.

Lawmakers cannot take the same approach again and raise much money. A state constitution change in the mid-1990s requires any tax increase that raises significant new revenue -- the current limit is about $80 million -- must be submitted to voters.

To support a tax proposal for transportation, Kasten said, she would need strong evidence. "I have never been much for raising taxes, but when there is a direct need and it involves the overall economy, you have to balance things and evaluate things very properly," she said.

And she said she would need to be convinced that Congress will actually go along with a significant drop in federal spending on highways that would make Rahn's prediction come true. "When the government puts teeth in legislation, it isn't always wisdom teeth."

For Keefe, the question of supporting a ballot measure to raise taxes would be based on a thorough review of the studies showing where the shortfall will occur. He also said he would seek advice from other area lawmakers with more experience, such as Sen. Jason Crowell, R-Cape Girardeau, and Rep. Steve Hodges, D-East Prairie. And he, too, would have to be convinced Congress won't continue spending federal highway dollars at the current level.

"Is it Chicken Little or is it a fact of life?" Keefe said of Rahn's prediction.

And Kinder, who like Keefe is making his first foray into politics, said his consideration of a new revenue source would be based on whether it helps or hurts the economy. The idea of creating toll roads sounds intriguing, he said, and Kinder added that he's "totally in favor of finding a way to keep our infrastructure strong."

The studies showing that the shortfall is real would have to be convincing, he said. "Like any government agency at any level, they are going to try to paint as bleak a picture as they can. That is just a given."

335-6611, extension 126

Transportation at a glance


Transportation funding


The Missouri Department of Transportation projects that by fiscal year 2010, it will have only $569 million to spend annually on road work, which will not cover the costs of regular highway maintenance. In the most recently completed year, MoDOT spent $1.4 billion on roads, including the proceeds from bonds sold following the passage of Amendment 3 in 2004.


Several ideas are competing for attention in the Missouri legislature that would boost funding, and most would require a statewide vote. The ideas include:

* Set aside 10 percent of the net increase in state general revenue each year for transportation. This idea would add about $30 million annually to the MoDOT budget.

* Change the Missouri Constitution to allow toll roads. This idea would require a statewide vote, and revenue would depend on which roads were chosen and the traffic volume.

* Impose a statewide 1 percent sales tax tied to a specific list of major projects. This idea would generate about $700 million a year and require a statewide vote.

* Increase sales and fuel taxes to support the department. The revenue would depend on the amount of each tax considered and would require a statewide vote.

* Impose a 3/8 percent sales tax dedicated for the Missouri State Highway Patrol operations and transfer patrol funding from fuel taxes to MoDOT. This idea would generate about $260 million annually.

SOURCES: MoDOT, Missouri Legislature, Missour Transportation Development Council, Fiscal Year 2008 Executive Budget.

On the Web

Internet sites providing more information about transportation issues in Missouri and the region include:n Missouri Department of Transportation:

* Southeast Missouri Regional Planning and Economic Develoment Commission report on transportation:

* Road Information Program report on Missouri transportation issues:

Meet the candidates

* What: League of Women Voters 158th District forum

* Where: Cape Girardeau Career & Technology Center, 1080 S. Silver Springs Road

* When: 7 p.m. Jan. 22

n Format: Opening statements, audience-written questions

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