New fuel tax without input from voters put forward

JEFFERSON CITY, Mo. -- A state highways commissioner has floated the possibility of asking the General Assembly to pass a limited fuel-tax increase without seeking voter approval.

Commissioner Bill McKenna of Crystal City said adding a couple of cents to the state's existing 17-cent tax on a gallon of fuel would provide a dedicated funding stream to help pay off the bonds the Missouri Department of Transportation issued in recent years to help jump-start its construction program. If the tax increase was small enough, it wouldn't trigger a constitutional requirement that the proposal go on the statewide ballot.

However, McKenna stressed he wasn't urging MoDOT to pursue that course of action, just raising the possibility. McKenna, a former Senate president pro tem, made his comments Thursday during a special commission meeting to discuss the department's long-range plans.

Under Missouri's revenue-limiting Hancock Amendment, most tax increases require voter approval. However, a provision of the amendment gives lawmakers some flexibility to authorize limited fee and tax increases in a given fiscal year on their own initiative.

The revenue cap on such increases is adjusted annually. State budget director Linda Luebbering said the current limit is approximately $70 million.

One cent of fuel tax generates roughly $38 million a year in total revenue, about $30 million of which goes to MoDOT. The remainder goes to cities and counties.

Since the local portion wouldn't count against the single-year restriction, lawmakers could, theoretically, bypass the electorate and add 2 cents to the fuel tax without reaching the limit.

However, the $70 million cap applies to the total of all revenue enhancements enacted in a given year. As was the case this year, lawmakers are expected employ a patchwork of various actions to help balance next year's budget. As a result, a 2-cent fuel tax increase combined with other efforts could bust that cap.

In 2000, lawmakers passed a bill that allowed MoDOT to issue up to $2.25 billion in bonds to accelerate road construction. The plan was to allow the department to go into debt in anticipation of voters approving a major tax increase later.

But that plan unraveled in August when voters rejected a $483 million transportation tax package by a nearly 3-to-1 margin. Because of the landslide of opposition, lawmakers aren't expected to put a similar proposal before voters in the near future.

The commission has already sold $650 million bonds and is committed to another $250 million, said MoDOT chief financial officer Pat Goff. Issuing the full $2.25 billion authorized by the legislature has been ruled out.

MoDOT will pay $75 million a year for 20 years to pay off the $900 million in bonds approved by the commission.

State Rep. Lanie Black, R-Charleston, said that with the resounding defeat of this year's transportation tax proposal, which he supported, he doubts lawmakers would attempt an end-run around voters. Black is a member of the House Transportation Committee.

Black said he would be reluctant to vote for any tax that attempts to sidestep the will of the people.

mpowers@semissourian.com

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