Fuel funding

Anyone who wonders what effect pricing has on consumers can see the impact at just about every retail outlet. And as sales go down, so does sales tax revenue, which is a percentage of each dollar spent on taxable items.

When it comes to motor fuel, the equation changes. Both Missouri's and the federal government's tax on gasoline and diesel fuel are fixed at a set rate for each gallon sold. So as the price at the pump goes up, fuel tax revenue only goes up if more gallons are sold. But in the face of recent increases in the cost of gasoline and diesel fuel, motorists have been purchasing fewer gallons.

The federal fuel tax is 18.4 cents a gallon for gasoline and 24.4 cents a gallon for diesel fuel. The Missouri fuel tax is 17 cents a gallon for both gasoline and diesel fuel.

High fuel prices are definitely affecting driving habits. Missouri's fuel consumption dropped 3 percent in June, compared to June 2007. Fuel tax revenue has declined too.

For Missouri, this makes the funding of future highway projects all the less certain. Some officials have estimated the state faces as much as $1 billion in highway needs in the coming years. How to pay for that is a big question, and the drop in the gallons of fuel being purchased adds more pressure.

This issue is one elected officials should be addressing before the coming highway funding crunch gets out of hand.