Mo. Senate OKs sales tax bump for transportation

JEFFERSON CITY, Mo. -- Missouri senators on Wednesday endorsed a proposed penny sales tax increase that could raise nearly $8 billion in a decade to pay for state and local transportation projects.

The increase would require voter approval and, if passed, would be resubmitted to the ballot after 10 years for Missourians to decide whether to continue.

Sponsoring Sen. Mike Kehoe, who served on the Missouri Highways and Transportation Commission before joining the Legislature, said the state needs to boost transportation funding and available options are limited. He said the gas tax would need to be increased by 20 to 25 cents to generate equivalent revenue.

"Missourians realize there is a need for investment in our infrastructure. They recognize the return for that," said Kehoe, R-Jefferson City. He said the measure could support as many as 270,000 jobs in Missouri during a decade.

The sales tax proposal was given first-round approval and needs another affirmative vote before moving to the House. The House Transportation Committee has embraced a similar measure, but Speaker Tim Jones would prefer that a sales tax increase be revenue neutral.

Preliminary approval in the Senate came shortly before the Legislature's annual midsession recess. The weeklong break frequently is a demarcation line for proposals that are advancing and those that have become bogged down.

Under the Senate measure, the state transportation commission would develop a list of projects to be funded before the tax appears on the ballot. If voters pass it, the commission would produce an annual status report for the Legislature and the governor.

Ten percent of the revenue would go to cities and counties for local transportation needs. The remainder would be for state projects and could go to highways, bridges and transportation needs such as ports, railroads and mass transportation. Senators rejected an effort to reserve a portion of the state's proceeds for projects other than highways and bridges.

When the transportation sales tax 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 voter approval of the tax, the Legislature's Joint Committee on Transportation could recommend suspending appropriations from the sales tax fund for projects that were approved but not yet been 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 projects.

The leading co-sponsor is Democratic Sen. Ryan McKenna, D-Crystal City, Mo., co-chairman of a task force that released a report this year concluding Missouri should be spending an additional $600 million to $1 billion annually for transportation.

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.

Earlier this year, transportation commissioner Rudy Farber also proposed a 1-cent sales tax increase. Farber released the plan in late January, which included funding to add an eastbound and westbound lane on Interstate 70 between Independence, Mo. and Wentzville, Mo.