Supporters of this year’s gas tax bill presumably don’t think they passed something that would violate Missouri’s constitution, but as my colleagues and I have outlined, there are reasons the bill’s opponents think otherwise. The question is whether the bill violates the state’s Hancock Amendment.
Recently, I’ve written a lot about the potential for Hancock Amendment issues with the gas tax bill but have yet to outline the more technical questions on the topic. Here is a non-exhaustive list of what I’ll be watching as the situation unfolds:
- How should the revenue impact of SB 262 be calculated for Section 18(e) compliance?
- The amendment states that the effect shall be measured the first fiscal year the tax increase is “fully effective.” Since the bill would be phased in over five years, should compliance be determined in each of the five years or only once when fully implemented in 2027?
- At one point Section 18(e) describes compliance as being based on revenue estimates, while elsewhere it refers to the measurement of actual collections. Does this mean the gas tax hike has to go into effect before it can be determined whether the bill should have received a public vote or not?
- If the calculation is based on estimated revenues, how should the state project the number of Missourians who will take advantage of the refund provisions and how will that impact the ultimate revenue calculations?
- If using actual collections, how much revenue will the gas tax hike raise and how much will be claimed for a refund? There’s always a real chance that actual collections differ widely from revenue projections, and if that turns out to be the case, what would that mean for the bill’s compliance?
- How will the other bills signed by Governor Parson this year impact compliance?
- Based on the answers to the SB 262 questions, similar principles will likely have to be applied to every bill that becomes law this year. What will that mean for Hancock Amendment compliance this year, and for years to come?
- For example, if the online sales tax bill currently sitting on the governor’s desk becomes law, the fiscal note projects it could potentially increase state revenue collections next year yet reduce total state revenues five years from now. In other words: Could bills passed this year exceed the Hancock Amendment cap next year but be in compliance once they’re fully implemented?
- What will the courts decide?
- If the gas tax bill becomes law, there will likely be legal challenges. As I’ve mentioned previously, the approach taken with SB 262 is unprecedented, so the courts could provide some clarity to this complicated topic. What the courts ultimately decide is anyone’s best guess.
- Based on the answers to the SB 262 questions, similar principles will likely have to be applied to every bill that becomes law this year. What will that mean for Hancock Amendment compliance this year, and for years to come?
Before too long, we’ll know where the governor stands regarding many of these questions, but if he signs the bill his decisions will likely only be the beginning in terms of adjudicating these issues.
