Mo. House panel mulls 1-cent sales tax increase

JEFFERSON CITY, Mo. -- Missouri Transportation Department Director Kevin Keith told a House committee on Tuesday that a penny increase to the state sales tax would generate enough revenue for transportation "to make a difference."

Keith said officials face a challenge in paying for infrastructure and the solution needs to be one the public can support.

Lawmakers are considering proposals that would seek voter approval for a 1-cent sales tax increase dedicated to transportation. The House Transportation Committee reviewed one measure Tuesday, and the Senate Transportation Committee has scheduled a hearing today about a similar idea.

Transportation officials estimate the sales tax increase would generate nearly $8 billion over a decade and could support 270,000 jobs during that period.

Supporters said before a sales tax measure appears on the ballot, the Missouri Highways and Transportation Commission would be asked to develop a list of projects. If voters passed the tax increase, the transportation commission would produce an annual progress report for the Legislature and governor.

Ten percent of the sales tax's proceeds would go to cities and counties for local transportation needs, and proponents said it would not be levied on gas, medications and groceries. In addition, the state gas tax rate would be frozen.

Among the supporters of the measure during a House hearing were those involved with construction and engineering. Some backers pointed to the possible economic development benefits.

"I don't think you could do anything for the state of Missouri that would boost the economy more than what this proposal would do," said Bill Stouffer, who previously was the chairman of the Senate Transportation Committee. He no longer serves in the Legislature and represented the Missouri Dump Truckers Association on Tuesday.

St. Louis Alderman Scott Ogilvie questioned whether the metropolitan areas would get the same benefits as rural areas.

"What is in this for our region?" he said.

Furthermore, Ogilvie said the sales tax measure would affect the elderly, people living on fixed incomes and those who do not own cars. He noted some of his constituents do not drive a lot on the state highways.

Rep. Dave Hinson, R-St. Clair, is sponsoring the transportation sales tax measure. Hinson said the measure could be changed to "relieve on the income tax side because there will be some pain on the sales tax side."

State transportation commission Chairman Rudy Farber also has proposed a 1-cent sales tax increase. It was released in late January and would include funding to add an eastbound and westbound lane on Interstate 70 between Independence and Wentzville.

Missouri officials have focused on infrastructure this year. There also have been proposals to issue several hundred million dollars in bonds for construction on college campuses and at state facilities. Some members of a House special committee created to examine bonding participated in the hearing Tuesday.

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

A transportation task force said in a report released last month that Missouri should be spending an additional $600 million to $1 billion annually for transportation. The transportation task force was created by then-House Speaker Steven Tilley. The former lawmaker supported the sales tax proposal Tuesday on behalf of his client Fred Webber Inc., which is involved in heavy and highway construction projects.