Missouri Voters Reject Tax Increase to Pay for Transportation Projects
Posted at 10:25 a.m. on Aug. 6, 2014
Missouri voters on Tuesday overwhelmingly rejected an increase in the state’s sales tax to pay for highways, roads, and bridges.
The proposed amendment to the state constitution was defeated 59 percent to 41 percent – even though it included elements designed to make it more palatable to voters: it would have explicitly banned tolling on state highways and would have prevented an increase in the state’s tax on gasoline and other motor fuels.
The constitutional amendment would have been a three-quarters of one percent increase to the state’s 4.225 percent sales tax.
The proposal also stipulated that the revenues be used only for highways, bridges, and other transportation projects and not be diverted to any other purpose.
Joseph Henchman, the vice president for legal and state projects at the non-partisan Tax Foundation said, “Like many states, Missouri has transportation needs larger than available revenues. The best way to fund it is through user payments, but the initiative instead tried to raise the general sales tax and banned tolls. That was bad policy.”
The Kansas City Star said in an editorial Wednesday that “Though we supported this constitutional amendment, in large part because it would have provided a welcome funding boost for Kansas City’s streetcar project, the proposal had substantial drawbacks. Tops among them was a stipulation that Missouri could not raise its gasoline tax or place tolls on its highways for the 10-year length of the tax.”
“Missourians spoke clearly yesterday that they are not willing to shoulder a $6 billion tax hike while special interests are being showered with special tax breaks, and the heaviest users of our roads are given a free pass,” said Scott Holste, the press secretary for Missouri Gov. Jay Nixon, a Democrat.
Holste’s reference “special tax breaks” meant a series of tax preferences that the Republican-controlled legislature passed but which Nixon has vetoed.
The rejection of the transportation tax put Missouri in contrast with three states where gasoline tax increases to pay for transportation took effect on July 1: New Hampshire, Indiana, and Maryland.
According to the Tax Foundation, Missouri ranks 14th highest in its per-person state and local sales and excise tax revenue. But the state’s gasoline tax, 17.3 cents per gallon, is sixth lowest among the states.
As Congress wrestles with how to raise more money for transportation given the flattening in the revenue raised from the federal tax on gasoline and diesel fuel, some states have opted for their own gasoline tax increases.
Others, such as Florida, New York, and New Jersey, have turned to public-private debt deals to pay for highways and other infrastructure.