Highway funding - Opportunity for reform

Thanks to a combination of a failed state highway program and the current state budget squeeze, Missourians are learning details about the Missouri Department of Transportation and how revenue from highway funding sources are being used that never mattered much before.

In the several years since MoDOT announced that the 15-year plan for highways adopted in 1992 was woefully short of funding -- the current figure is about $32 billion -- a lot of attention has been given to finding new sources of highway revenue. Along the way, many Missourians have learned for the first time that much of what is considered traditional highway revenue goes for other purposes. Last week, MoDOT director Henry Hungerbeeler said his agency receives only 61 cents of every dollar of revenue collected from highway user fees.

In addition to state taxes on fuel, those fees include levies on motor-vehicle sales and license and registration fees.

Of the $1.16 billion in annual revenue from these sources, MoDOT gets $710 million. A large chunk ($249 million) of the rest goes to cities and counties for local road and bridge projects. So even though this money isn't used by MoDOT, it is used for highways.

Another major recipient of highway revenue is the Missouri State Highway Patrol, which receives approximately two-thirds, $120 million, of its ($179.3 million) budget from highway user fees.

The rest of the highway money goes to various agencies including the Department or Revenue, the Department of Economic Development, the state treasurer's office and the state auditor's office.

If every dime of the state highway funding went to MoDOT, the agency would have about $450 million more to spend on transportation needs -- roughly the amount sought in August in a funding package rejected by Missouri voters by nearly 3-to-1 opposition. But, in reality, more than half (the $249 million that goes for cities and counties) already is used for roads. And much of the remainder is constitutionally required to be diverted. Ending "diversion" of highway funds to other agencies would require voter approval of constitutional amendments. And the total amount to be shifted would amount to about $80 million.

With little more than a month before the Missouri Legislature goes back into session, here's the situation:

The biggest item on the legislative agenda will be a balanced budget that faces a potential revenue shortfall of $500 million or more at current spending levels. Voters have demonstrated they are in no mood for a tax increase even if it's for state highways. Many Missourians remain confused about the diversion of highway funds for non-highway purposes. Meanwhile, some legislators say they will work in the coming session to end the diversion for any purposes that aren't strictly related to highways.

Generally, these legislators believe most of the funding for the State Highway Patrol is a legitimate use of highway funds. A portion of its revenue from highway user fees goes for forensic labs, administrative expenses and the patrol's Drug and Crime Control Division.

But here are a couple of contentious issues wrapped around any attempt to allocate more highway funds for MoDOT:

What will happen to non-highway agencies and programs that currently rely on highway funding sources?

What accountability is in place for highway funds that are used for non-highway purposes?

Legislative reformers believe a case can be made for the high funding priority highways deserve. At the same time, they believe many of the non-highway programs currently getting highway revenue can be scaled back or funded by eliminating or cutting other state programs.

As for accountability, MoDOT has become the most scrutinized part of state government in recent years, while highway funds used by other agencies have received little attention until now.

With the rapid growth in state revenue and accompanying spending spree that existed for almost a decade before the current economic slump hit two years ago, most state agencies have become accustomed to a style which Missouri's taxpayers can no longer afford. Prudent legislators will regard the current budget crunch as an opportunity to eliminate some of the excesses of state government.

In the process, careful consideration should be given to shifting as much of state-generated highway funds to highway purposes as possible, thus giving taxpayers more of the better roads they're already paying for.

This task won't be easy. But it's time to put reasonable reins on the cost of state government.