The House Transportation Committee heard Senate Bill 262, a measure that would create a refundable 2.5¢ annual increase on fuel taxes each of the next five years while also taking steps to future-proof the funding for our roads and bridges moving forward into the 21st century.
Missouri’s roads and bridges are funded through a 17¢ per gallon fuel tax on both diesel and gasoline. This funding goes directly to the Missouri Transportation and Highway Commission and cannot be diverted for any other purpose. It is a true user fee that charges those who use the roads for maintaining them.
The tax has historically been increased every 20 to 30 years and was increased to 17¢ in 1996. Since then, inflation and increasing gas mileage efficiency has eaten away at the purchasing power of those funds, leaving the Missouri Department of Transportation with less than half the buying power they had in the 1990s. Additionally, Missouri has the lowest fuel tax in the lower 48 states while also having the seventh largest state road system in the country.
Missouri’s location in the country makes it a transportation nexus that relies on our ability to connect the Atlantic to the Pacific, Canada to Mexico and farmers to markets in order to drive our economy. MoDOT estimates our state continues to fall behind with about $800 million in annual unfunded needs. If passed and fully implemented, SB 262 would not fully meet MoDOT’s requests, but would add about $500 million annually to MoDOT’s budget. If fully implemented, the new fuel tax would be 29.5¢/gallon, nearly equal to Iowa’s 30¢/gallon and five cents more than Kansas, but still 25¢ cheaper than Illinois. Additionally, if someone keeps their gas receipts, then they can apply to be refunded the additional fuel tax increase.
One of my longstanding concerns has been with how we address MoDOT’s needs in a 21st century fashion. Market factors and federal mandates continue to bring more fuel efficient or electric vehicles into the market. In fact, the Edison Electric Institute projects that more than 20% of annual vehicle sales will be electric vehicles by 2030. GM has announced plans to only sell electric vehicles by 2035. Electric vehicles do not pay motor fuel taxes at all, but do pay for special fuel decals in Missouri, a step that has yet to be taken at the federal level. But as vehicles become more fuel efficient, the way we fund our infrastructure becomes more regressive, unduly increasing the burden on rural and low-income drivers.
SB 262 takes two steps to help on this front. It gradually increases the electric vehicle special fuel decal from $75/year to $150/year. More importantly, it establishes an Electric Vehicle Special Task Force of industry leaders and legislators to look deeper at the issue and prepare the state to adopt a Vehicle Miles Traveled program that builds on successful programs in Oregon and Utah. Those states have established pilot programs and found ways to protect the privacy of drivers while also building the program in such a way that incentivises participation without tax credits or loss of revenue. A VMT-based system reinforces the user-pays principle. I do have concerns that another task force would just kick the can down the road, however, this puts the follow-through burden on freshmen legislators like myself to not let the state’s infrastructure spiral into another near-dangerous condition.