Missouri Transportation Funding

Executive Summary:
MoDOT is looking for more money for its highway system. Two proposals for highway funding were introduced in the General Assembly this year: both involved an increase in the sales tax; both had 8-lane interstates with 4 lanes reserved for trucks as their centerpiece; one included nothing for transit or other non-highway modes, while the other included a mere 2 percent. If the General Assembly fails again next year to put a funding proposal on the August, 2008, ballot, it's anticipated that highway interests will put their own proposal on the ballot through the initiative process. These issues will be discussed at a "Transportation Funding Summit " to be held in Jeff City on July 31. The summit is free and is sponsored by the Joint Committee on Transportation Oversight of the General Assembly. It's important that representatives of constituencies other than highway interests attend the July 31 summit to demonstrate the needs of other modes.

Here’s the Situation
Like most other states, Missouri has been under-investing in transportation for decades. Missouri highway interests feel that need intensely, and they are currently engaged in an effort to raise additional revenue for highways.

In 2004 Missouri voters passed Amendment 3. That measure captured additional general revenue for highways in the form of the sales tax on motor vehicles. The Amendment 3 money has been used largely to sell bonds to finance an asphalt overlay on 2,200 of the 32,000 miles of state highways. Repayment of the bonds will reduce money needed for highway maintenance to its pre-Amendment 3 level.

While Amendment 3 provided a significant infusion of money for highways, it did very little for public transit and other non-highway modes. State funding for transit – both the urban transit systems and the rural systems that serve every county in the state – has actually declined in real dollars. Funding Missouri ’s share of the cost of intercity rail passenger service provided by Amtrak continues to be an annual budget battle.

Two proposals have been offered

  •  Senator Stouffer has proposed a one-cent sales tax to finance total reconstruction of I-70 and I-44. His proposal is 100 percent for highways.
  •  Representative St. Onge has proposed a half-cent sales tax, coupled with increases in several highway user fees including fuel taxes, to reconstruct I-70 and provide some additional money for other modes. His proposal is 98 percent for highways.
  •  Both proposals have been presented as a way to “start the discussion” about transportation funding.
  •  Both proposals revolve around reconstruction of the interstates as 8-lane highways with dedicated truck-only lanes. (MoDOT has already joined with three other state DOTs to apply for federal "Corridors of the Future Program" funding to study adding trucks-only lanes to a 789-mile stretch of I-70 across Missouri-Illinois-Indiana-Ohio.)

Concerns

A     Both proposals are all or almost all for highways, ignoring the needs of public transit and other non-highway modes.
B     A sales tax is proposed as a major source of revenue.
  -   Sales tax revenue would not be proportional to the transportation burden (e.g., ton-miles of freight) placed on the highway system. Consider the relative burden of a $100 load of gravel vs. a $500 iPhone.
  -   Highways would compete directly against other potential uses of general revenue for essential services such as health care or schools.
C     The emphasis on 8-lane interstates is intended to attract more trucks to Missouri by making distribution of goods an even bigger part of the state’s economy, but without recovering revenue from trucking commensurate with their cost – i.e., a major subsidy to trucking.
D     If the legislature fails next year to put a transportation funding measure on the August, 2008 ballot – that’s the target year since Congress is expected to raise the federal gas tax in 2009 – then highway interests are expected to mount an initiative petition campaign that suits their own needs.


The July 31 Summit
A Transportation Funding Summit will be held in Jeff City on Tuesday, July 31, 2007. It’s sponsored by the Joint Committee on Transportation Oversight of the General Assembly, with the cooperation of MoDOT. Attendance will be free.

The agenda appears to have a highway focus. Here’s what we expect:

  • MoDOT Director Pete Rahn will describe Missouri highway needs – but it’s likely he’ll say little or nothing about non-highway transportation needs
  • Senator Stouffer and Representative St. Onge will describe their respective funding proposals
  • Tyler Duvall, Assistant Secretary for Transportation Policy at USDOT, will present an overview of prospects for federal transportation funding – less federal money available and the need for more-creative funding mechanisms, including toll highways and congestion (or time-of-day) pricing.
  • An economist from the Associated General Contractors will likely tout the favorable “multiplier effect” of spending money on highways – but without mentioning the multiplier effect of state investment in other public goods and services.
  • A panel of engineering company experts will likewise tout the advantages of investing in highways.
Our strategy
We encourage attendance at the July 31 Summit by representatives of non-highway transportation interests, and also by non-transportation constituencies whose needs compete for Missouri tax revenues.

Additional resources and links:
Announcement of the July 31 Transportation Funding Summit
http://www.modot.org/ExpressLane/documents/07TranspFundingSumInvite.pdf

Register by July 16 for the July 31 Transportation Funding Summit :
http://www.senate.mo.gov/d21-transportation/webform1.aspx

Brochure describing the 8-lane interstate highway proposal (dedicated truck lanes):
http://www.senate.mo.gov/07info/comm/tran/I-70%20pamphlet.pdf