Amendment 3 would dedicate money for state highway bonds

JEFFERSON CITY, Mo. -- In an effort to provide the Missouri Department of Transportation with additional money without a tax increase four years ago, state lawmakers authorized the agency to sell up to $2.25 billion in bonds to finance more road and bridge construction projects.

Worried about the consequences of overborrowing without an infusion of new money to pay off the debt, however, MoDOT issued only $907 million worth of bonds.

If Missouri voters ratify Amendment 3 on Nov. 2, it will provide MoDOT with a dedicated funding source to cover future debt payments and allow more bonds to be issued by redirecting money within the existing state budget.

Once fully implemented in 2008, the proposal would provide an estimated $160 million a year in additional transportation funds. The bulk of that amount, $130 million annually after four years, would be provided by gradually shifting half of the proceeds from motor vehicle sales taxes that currently go to the state's general fund and depositing it in a newly created road bond fund. That money is currently distributed among all state agencies.

Missouri Chamber of Commerce and Industry spokesman Ray McCarty said the bond provision provides some control over how MoDOT would be able to use the new revenue, which wouldn't be the case if it were dumped into the overall transportation budget.

"We wanted to make sure that new money would go for new bonds and not be used for other purposes," McCarty said.

Although the State Highways and Transportation Commission, MoDOT's governing board, would have some discretion on which projects will be bond-financed, McCarty said the 2000 bond authorization law earmarks the proceeds for projects in MoDOT's abandoned 15-year construction plan, which it dropped in 1998 as financially unsound.

MoDOT's annual payments on the existing bond debt are around $75 million and will remain close to that figure until 2021. The payments will drop sharply in the final two years before the bonds are paid off.

MoDOT spokeswoman Sally Oxenhandler said the aim of Amendment 3 supporters is for the additional revenue to pay for the issuance of new bonds. However, she said the proposal appears to allow for repayment of the existing debt, which would free up money that otherwise would be earmarked for bond payments. Oxenhandler said the commission has had no discussions regarding the matter.

Pat Martin, spokeswoman for the group No on Amendment 3, said the proposal wrongly emphasizes new construction instead of the true need of repairing the existing system. She said that would further erode public confidence in MoDOT.

"That's not what people think they're voting for -- new roads that we then won't have the money to maintain," Martin said. "This will hurt MoDOT's credibility."

As of 2009, if it is determined there is more money in the bond fund than is needed to service the debt, the excess could be reallocated for general road improvements.

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