Missouri rejects sales tax hike for roads

Link to article here.

This article says some Missourians would have been fine with a gas tax increase, but not this proposed sales tax. There's a natural tie-in to funding roads from users of the roads through a gas tax, but politicians don't want to be seen as raising gas tax, so they proposed a sales tax instead and threw in a bunch of transit projects (rail, bike trails, etc.). Elected officials keep dancing around the subject and digging themselves in deeper - adjust the gas tax to properly fund our highway system and stop trying to make transit advocates happy by endless compromises that get us nowhere toward fixing gridlock.

Missouri transportation tax proposal soundly defeated
August 06, 2014  •  By Virginia Young
St. Louis Post Dispatch

JEFFERSON CITY - Missouri voters delivered a resounding defeat Tuesday to a proposed statewide sales tax that would have raised billions of dollars to build roads, bridges and other transportation projects.

In unofficial returns, Constitutional Amendment 7 was rejected by nearly 59 percent of voters. It would have raised the sales tax by three-quarters of a penny per dollar spent.

Several opponents interviewed at the polls in St. Louis County criticized as “regressive” a sales tax they said would have a disproportionate impact on low-income households. Most complained that a tax on goods other than fuel made little sense.

“It’s unfair to have a sales tax,” Robert Kirby said as he exited the Sunset Hills Community Center after voting with his wife, Carole. “I don’t have a problem with a gas tax. Add 10 cents a gallon for gas and 20 cents a gallon for diesel. That’s fair.”

“But we don’t think it’s fair not to tax the truck drivers” crossing the state on interstate highways, his wife added.

Supporters said they couldn’t overcome Missourians’ anti-tax sentiment.

“Missourians, they don’t like tax increases, they don’t want to pay more, no matter what the situation is,” said Sen. Mike Kehoe, R-Jefferson City and the sponsor of the proposal. Kehoe, who watched the returns in downtown St. Louis with business leaders, said the problem remained, “so we’ll have to go back to the drawing board.”

Representatives of the Missouri Highways and Transportation Commission scheduled a news conference for this morning on what happens next. In a statement late Tuesday, Chairman Stephen Miller said the commission was “very disappointed in the result, but the people have spoken and we respect that.”

Officials had hoped to generate about $5.4 billion over 10 years to pay for hundreds of projects, including the reconstruction and widening of Interstate 70 from Independence to Wentzville.

Opponents complained that the trucking industry does most of the damage to the roads but would have paid little for repairs. They noted that the Legislature passed a special sales tax exemption for tractor-trailers in 2012. Also, Amendment 7 would have barred fuel tax increases for 10 years.

Tom Shrout, a spokesman for opponents, said the critics “kind of stumbled on to this phrase: Trucks don’t pay. It’s a simple message that resonates with the public.” He said his group would meet Thursday “and talk about next steps.”

Organized as Missourians for Better Transportation Solutions, the opponents ran a shoestring campaign. It reported raising about $27,000 — $10,000 of it from the St. Louis County Municipal League.

The pro-sales tax campaign, Missourians for Safe Roads & New Jobs Inc., raised more than $4 million. Much of it came from contractors, labor unions, engineers, trucking companies and others that stood to gain.

Department of Transportation officials have said that Missouri cannot continue to rely on the fuel tax because its proceeds drop as drivers turn to energy-efficient cars or drive less. MoDOT’s construction budget is projected to decline to $325 million in 2017, the lowest since 1992. It currently stands at about $700 million.

Without more cash, the state soon won’t be able to afford highway maintenance, much less new construction, officials say.

While the bulk of the new money would have gone toward roads and bridges, MoDOT’s project list also set aside funds for railroads, airports, sidewalks, bike paths and bus systems.

The pro-sales tax campaign stressed that the money would be used for a specific list of safety projects; that persuaded some voters.

“We need it as long as it goes to improve the roads,” said Debra Seals, of Normandy. “At least we know where it’s going.”

Critics said Amendment 7 didn’t do enough for alternate modes of transportation, and the sales tax would have been too high.

Though groceries and prescription drugs would have been exempt, the overall sales tax rate would have climbed to around 10 or 11 percent in some areas.

The state rate would have hit 4.975 percent, up from 4.225 percent. Local sales taxes are levied on top of that.

“The rates are getting high enough that it tends to drive people to the Internet” to shop,” said Tim Fischesser, executive director of the St. Louis County Municipal League, which opposed the measure. “Everybody that has sales taxes ends up losing, even though MoDOT would gain.”

Transportation officials have been working for more than a decade to find more money. In 2002, voters defeated a proposed $483 million sales and fuel tax increase.

“There is no perfect solution,” said Kehoe, the sponsor. He said Amendment 7 was crafted around polling that showed a sales tax was most likely to pass at the polls. He said the fuel tax would have to be raised 20 to 25 cents per gallon to generate the money needed.

So Kehoe sponsored Amendment 7 and got legislators to put it on the ballot. In bipartisan votes, the Senate approved it 22-10, and the House 105-43.

But Gov. Jay Nixon threw backers a curve. First, he moved the election to the August primary instead of the Nov. 4 general election, a move that gave supporters only 60 days to devise a project list and campaign.

MoDOT hurriedly assembled the list, based on regional planning groups’ priorities. Major St. Louis-area projects included $350 million to improve Interstate 270 between Lindbergh Boulevard and Highway 367, and $200 million for Interstate 70 between Natural Bridge and Hanley roads.

Then, in early June, Nixon came out against the amendment, saying it would “fall disproportionately on Missouri’s working families and seniors by increasing the cost of everyday necessities like diapers and over-the-counter medication while giving the heaviest users of our roads a free pass.”

Kehoe said that Nixon had “never engaged” on the highway funding issue.

“Missouri has 32,000 miles of roads and 10,400 bridges,” Kehoe said. “When people start seeing bridges close, they’re going to say, ‘Hey, we do have a problem."

Link to article here.

It's an outrage that bike and hike trails trolleys and other transit projects would be deceptively put on the ballot when voters think they're approving a tax hike for road projects.

Missouri Puts Transportation Funding Measure On Ballot
Missouri transportation funding ballot initiative would raise taxes by $5 billion and ban tolling statewide.
The Newspaper.com
July 14, 2014

Voters in the Show Me State will be asked next month whether they support a $5 billion sales tax hike to pay for the Missouri Department of Transportation's wish list of spending priorities, including road maintenance as well as a long list of projects unrelated to driving. The funding language will be added to the state constitution if a simple majority of voters approve it on the August 5 primary election ballot.

The proposal would raise the state's sales tax by 0.75 percent for the next ten years, mandating that the funds be spent only on transportation. Although the ballot language highlights the money going to "state and local highways, bridges and transportation projects" it does not clearly point out that the list of priorities includes nature trails, trolleys, bus terminals, bicycle lanes and airports. If it passes, the tax would automatically appear again on the ballot for reauthorization by a majority vote in the year 2024 and every ten years thereafter.

According to the state funding priority list, the majority of funds would go toward resurfacing and repairing bridges and roads, but very little extra capacity would be added to the road network. In the central region, for instance, Jefferson City would add lanes to Route 53 for $17 million. Route 50 would receive new lanes from California to Tipton at a cost of $91 million. Route 63 would see extra lanes in Rolla for $11 million.

In the central region, every transit project would receive $5.4 million to expand service hours. On top of this, Boone County would receive $10.5 million will add two hours to bus service hours. At a cost of $8 million, Jefferson City will get four more bus hours, and the Amtrak station will get $5 million for renovations. Another $5 million would improve Amtrak rail service in Osage.

Kansas City would spend $124 million on streetcars, and $24 million on bicycle paths, and $35 million for other bicycle projects. Buses would receive $85 million. St. Louis Mayor Francis G. Slay (D) praised the tax hike plan precisely because it would lavish millions on his city's non-motoring priorities.

"For the first time ever, the state would support major funding not just for highways and bridges but also for special transportation needs and opportunities in cities like ours," Slay wrote.

If the measure is approved, toll roads would be banned from Missouri for ten years or more.

"The state highways and transportation commission shall not authorize, own or operate a toll highway or toll bridge on a state highway or bridge while the sales and use tax authorized by this section is in effect," Proposition 7 states. "A county or municipality shall not authorize, own or operate a toll highway or toll bridge on any highway or bridge under its jurisdiction while the sales and use tax authorized by this section is in effect."

A copy of the ballot measure is available in a 1.8mb PDF file at the source link below.

Source: Proposition 7 (State of Missouri, 7/13/2014)