Bumpy road for sales tax increase in Missouri
The Kansas City Star
Transportation officials at all levels of government are concerned about the fading effectiveness of the gasoline and diesel tax as a way to finance construction and maintenance of critical infrastructure.
Fuel-efficient vehicles make fewer trips to the pump, and the sluggish economy has resulted in fewer miles traveled — all of which means less revenue for roads and bridges.
So lawmakers in many states have been reaching for other revenue sources, mainly the sales tax.
Missouri is the latest to discuss such a step. Kansas supplemented its fuel tax with a sales tax a few years ago. Virginia Gov. Bob McDonnell has even proposed ditching the fuel tax altogether and paying for transportation with a huge sales-tax boost.
But Missouri lawmakers shouldn’t be so eager to discount the role of the fuel tax, which has the virtue of being levied only on those who use roads. This tax rightly falls under the heading of a “user fee,” the traditional method of funding transportation projects.
Moreover, there’s another reason fuel taxes provide less revenue oomph these days: Legislators refuse to raise them. Missouri’s 17-cent fuel tax, for both gasoline and diesel, hasn’t been increased since the early 1990s. Same goes for the federal gas tax, at 18.4 cents a gallon for gasoline and 24.4 cents for diesel.
That puts some perspective on the current debate in Missouri, where transportation officials want a 1-cent increase in the state sales tax to jumpstart road construction.
Voters would be asked to approve the new tax, which would remain in effect for 10 years, raise about $790 million annually and, among other things, help pay for the long-overdue rebuilding of Interstate 70.
In general, people tend to find sales taxes more acceptable than fuel taxes, but there are limits to everything.
In Kansas City, we’re seeing a sales-tax stacking effect. Extra sales taxes already are levied at the Country Club Plaza. In the Power & Light District there’s an extra one-cent sales tax, with another one-cent soon to come in the form of the streetcar tax.
Jackson County Executive Mike Sanders is jockeying for a one-cent countywide tax to pay for his commuter rail plan. If approved by voters, that would boost the regular sales tax to 9.35 percent throughout the county — before adding on the extra taxes levied on the Plaza, downtown and in parts of other cities in the county such as Lee’s Summit and Independence.
If lawmakers wanted a broad-based transportation plan, they’d also press for an end to Missouri’s longstanding aversion to tolls. A toll is the ultimate user fee because only those who use the road pay. And tolls free-up scarce transportation dollars for use elsewhere.
Admittedly, it would be politically tough to increase fuel taxes enough to produce $790 million a year. That would require an increase of 20 to 30 cents a gallon. But that doesn’t mean the fuel tax should be ignored. Raising it would help spread the load.
In considering a transportation sales tax, Missouri officials should keep in mind the hefty local taxes that are already in place.