Politicians rallying to end 'diversion' of road funds

Sunday, March 14, 2004

JEFFERSON CITY, Mo. -- Colleen Di Gregorio emerged from the Department of Revenue's motor vehicle office frustrated -- for a couple of reasons.

First, she had to pay around $30 for new license plates for the Honda she had been driving for years because she transferred the title from her parents to herself.

Then, there was the knowledge that a chunk of her fees never would reach the state Department of Transportation.

"It's troubling, because you pay and then you don't have decent roads," said Di Gregorio, 24, who recently moved to Kansas City but was taking care of her car licenses in Jefferson City. "So why keep paying it if you're not going to see the end result?"

Politicians at the Capitol say they have heard such grumbling and have come up with a solution.

Their proposal: Amend the Missouri Constitution to end or reduce what they describe as the "diversion" of highway user fees -- vehicle and driver's licenses, motor fuel taxes and vehicle sales taxes -- to various state agencies.

Last year, Missouri collected more than $1.3 billion in road-related taxes and fees.

About $255 million of that went to cities and counties for local roads, while about $164 million went to general state revenue and school funds.

And $176 million went to state agencies that perform road-related duties -- the Missouri State Highway Patrol, which enforces traffic laws; the Department of Revenue, which collects the road taxes; the Office of Administration, which handles employee benefits; the state auditor, which audits the transportation department; the state treasurer, which invests road funds; and the Department of Natural Resources, which conducts environmental analyses for the transportation department.

Following all the subtractions, the Missouri Department of Transportation received barely 55 cents of every $1 collected.

The transfer of road funds is one of the reasons people "perceive a problem in highway accountability," said state Sen. Jon Dolan, who is sponsoring the proposed constitutional amendment.

"They want to know that every cent they pay on Missouri's motor vehicle sales tax, and especially the fuel tax, goes to the construction of highways," said Dolan, R-Lake St. Louis, chairman of the Senate Transportation Committee.

Because of that, the effort to reduce the so-called diversion of road funds has risen to the top of politicians' transportation agenda.

Dolan's proposal passed the Senate last month and is pending in a House committee. If also approved by the House, it would appear on the November statewide ballot.

Politicians frequently cite the overwhelming voter defeat of an August 2002 transportation tax proposal as evidence that Missourians don't trust that their current highway dollars are being used wisely. They see addressing the "diversion" matter as a prerequisite to any future tax plan.

'Following the constitution'Yet dubbing the transfers as "diversions" is misleading, say some state officials and interest groups.

The Missouri Constitution directs that portion of highway user fees to cover the cost of collection, employee benefits and the enforcement of traffic laws. Last year, a full 99 percent of the $176 million in transferred road funds went to agencies carrying out those general purposes. The constitution also directs portions of the highway user fees to cities, counties, schools and the state's general revenue.

"I've always maintained there is no diversion -- we're following the constitution," said Bret Fischer, a supervisor in the Office of Administration.

The Department of Revenue, for example, commonly gets a portion of the taxes it collects. It keeps a fraction of all city and county sales taxes, as well as special state sales taxes.

Revenue director Carol Fischer (no relation to Bret Fischer) said if the reimbursements from highway user fees ended, the department might have to reduce staff, resulting in longer lines to renew vehicle and driver's license. To avoid that, the legislature would have to replace the lost money from general revenue, essentially take money away from other purposes such as education or health care.

Because of that possibility, the Missouri National Education Association is opposing the proposed constitutional amendments.

Dolan's proposal would keep road funds flowing to the Highway Patrol and its related fringe benefits but phase out transfers to other agencies over five years. Over the following 10 years, the portion of vehicle sales taxes now going into general revenue would be directed instead to state roads. His plan would not effect the portion of the sales tax currently going to schools.

A faster timetable is proposed by the group behind the initiative petition, which seeks to redirect the general revenue portion of the vehicle sales tax and to end the transfer of road funds to agencies other than the highway patrol and Department of Revenue.

The spokesman for the initiative campaign is lobbyist and lawyer Rodney Gray, who also directed the campaign for the failed 2002 transportation tax proposal.

"We think the ending of diversion to other state agencies is an important public policy issue," Gray said, "and secondly, this would provide additional transportation funding without a tax increase."

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