Missouri Senate passes transportation sales tax

JEFFERSON CITY, Mo. -- The Missouri Senate approved a penny sales tax increase Thursday that could generate hundreds of millions of dollars annually for a highway system that long has been largely dependent on fuel taxes.

The proposal, which is expected to raise nearly $8 billion over a decade, would require voter approval to enact initially and would be resubmitted to the ballot every 10 years after that. It would generate money not only for state highways but also for local roads and other modes of transportation such as railroads, airports, mass transit and river ports.

Senators passed the sales tax measure 24-10, with 14 Republicans and 10 Democrats supporting it. All the "no" votes were from Republicans. The proposal now goes to the House, where a similar 1-cent transportation sales tax increase was advanced Thursday by a House committee.

Voting with the majority was state Sen. Wayne Wallingford, R-Cape Girardeau.

Sen. Mike Kehoe, R-Jefferson City, acknowledged that tax increases generally are unpopular in Missouri, but he said funding is needed for a transportation system that includes more than 10,000 bridges and 30,000 miles of roads. Kehoe, who served on the Missouri Highways and Transportation Commission before joining the Legislature, said the current gas tax model is "broken" because people are driving more fuel efficient vehicles and buying less gas when prices rise.

Kehoe said the transportation network is important in everyone's daily life.

"No matter where you are in the state -- even if you don't own a car -- you're receiving benefits from the state's infrastructure system," he said. "If you're buying off the Internet and a UPS truck is delivering to your front door, that truck had to get there somehow. If you walk to the grocery store and buy things off the shelves, those products got to that store somehow."

Opponents voiced concerns about increasing taxes, and a couple lawmakers expressed doubts that the idea could win at the ballot box.

Sen. John Lamping contrasted the transportation sales tax with legislation passed earlier in the week by the Senate to cut the income tax for individuals and corporations by three-quarters of a percentage point over five years while raising the state sales tax by one-half cent over that period. Lamping, R-St. Louis County, said lawmakers should work to shrink government and limit taxes.

"This bill proposes constructing a road that will lead to bigger government and $8 billion in higher taxes," Lamping said.

Under the Senate measure, the state transportation commission would develop a list of projects to be funded before the tax appeared on the ballot. If passed by voters, the commission would produce an annual status report for the Legislature and the governor. Tax proceeds would be divided, with cities and counties each receiving 5 percent for local transportation needs. The remainder would go for state projects.

The sales tax would not be levied on medicine and food, and when it is in effect, voter approval would be needed to change the gas tax rate or place tolls on existing roads and bridges.

In the sixth year after voters approved the tax, the Legislature's Joint Committee on Transportation could recommend suspending appropriations from the state transportation sales tax fund for projects that were approved but not yet included in the statewide improvement program. The suspension would require a two-thirds vote in the joint committee and passage of a resolution by the House and Senate. It would be lifted when the transportation commission adds back the project.

Concern about funding for Missouri's transportation system is not new. As early as 2006, then-Transportation Department Director Pete Rahn said the annual highway construction budget would decline significantly by 2010 as bond payments for past projects came due.

The decline was delayed because of federal economic stimulus money approved in 2009. But in the last year, Missouri's highway construction funding has fallen from $1.2 billion to less than $700 million.