Amendment 3 follows trend of earmarking state revenue

JEFFERSON CITY, Mo. -- At the time Missouri voters approved earmarking half of the proceeds from sales taxes on motor vehicles for road improvements 25 years ago, the state's discretionary general fund constituted 47.5 percent of the overall state budget.

In the past quarter century through statute and constitutional amendment, however, various revenue streams increasingly have been dedicated for specific purposes, limiting the degree of discretion lawmakers have concerning how state funds are allocated.

In part because of that trend, while Missouri's budget is nearly five times larger than it was in 1979 in terms of total dollars, the general fund's portion of state spending for the current fiscal year has slipped to 37.8 percent.

Amendment 3, which appears on the Nov. 2 statewide ballot, would redirect the remaining half of motor vehicle sales taxes to the Missouri Department of Transportation. The measure would also restrict the so-called diversion of highway user fees, such as fuel tax revenue, to other state agencies.

Of the estimated $160 million a year supporters say Amendment 3 would provide MoDOT when fully implemented in 2008, however, $130 million would be taken out of general revenue.

Jewel Patek, the campaign manager for the Committee to Improve Missouri's Roads and Bridges, said setting aside this revenue for transportation makes sense.

"These are the types of fees and taxes that are appropriate to fix roads," Patek said. "It seems pretty obvious that money paid in when a motorist purchases a vehicle should go for roads."

1979 ballot

Patek noted Missouri voters agreed in 1979 when, by a nearly 3-to-1 margin, they redirected the first half of the motor vehicle sales tax money out of general revenue, which is shared by most government agencies.

Natural growth in general revenue collections, Patek said, should more than cover any losses.

State Sen. Wayne Goode, a longtime state budget guru, said the trend of earmarking revenue began in earnest following the ratification of the Hancock Amendment in 1980. The amendment limited growth in state revenue collections but exempted voter-approved taxes from that restriction.

It is much easier to sell voters on tax increases if there is a guarantee the money will be used to achieve specific goals, said Goode, D-Normandy. The downside is that earmarking leaves little flexibility when funding needs change.

"I would never argue that highways don't need more money," Goode said. "Highways do need more funding, but they should go out and get their own by raising user fees instead of basically raiding general revenue."

MoDOT's budget has more than tripled in the last 25 years to $1.64 billion for the current fiscal year. In that same period, however, its share of the total budget has dropped from 13.8 percent to 8.7 percent.

Goode, who during his 42 years in the legislature has chaired both the House and Senate budget committees, said various interest groups often complain that their portion of the overall budget keeps getting smaller. However, he said that argument can be misleading.

"The reality is that older programs, even when they are funded enough to keep up with inflation, still get a shrinking percentage of the state budget as we move forward because there are always new things coming into existence," Goode said.

The motor vehicle sales tax money would be shifted over four years, or about $35 million a year.

"Thirty-five million dollars out of a $19 billion state budget is a small price to pay to improve Missouri roads," Patek said.

mpowers@semissourian.com

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