Missouri’s Fuel Taxes in Context
On March 1, Iowa increased its fuel taxes by 10 cents per gallon. Other states, including Nebraska, Minnesota, South Dakota, and Illinois, are considering following suit. The Missouri Legislature is currently entertaining multiple proposals for increasing the state gas tax, and just recently a new bill was introduced in the senate (SB 540) calling for a 6 cent increase over two years.
Why the push to raise the gas taxes? Missouri, like other states, depends on its fuel tax to fund its state highway system. In 2014, the state’s fuel taxes brought in approximately $489 million for the Missouri Department of Transportation (MoDOT). Furthermore, because 30 percent of fuel tax revenue goes to cities and counties, local governments also rely on fuel taxes for road improvements. In 2014, fuel taxes provided $179 million to local governments statewide.
However, given the amount MoDOT claims it needs to maintain the state highway system, current revenue may be insufficient. Missouri’s fuel tax has not increased since 1996. With Missourians buying less gas, and the costs of maintaining the state highway system growing all the time, MoDOT warns of a large budget shortfall by 2017. As fuel taxes allow people who benefit from the roads to pay for them, it is an attractive funding source for roads in Missouri and other states.
Fortunately for Missourians, any fuel tax increase would be from a low base. At 17 cents a gallon (both regular and diesel), Missouri has the fifth lowest regular fuel tax and fourth lowest diesel fuel tax in the nation. As of January 2015, the average national state fuel tax was 29.89 cents per gallon regular, 30.02 cents per gallon diesel. Missouri also has a low fuel tax compared to its neighbors:
As the map above demonstrates, Missouri has a lower fuel tax than any neighboring state save Oklahoma, which substantially tolls its state roads. The size of Missouri’s state highway system adds to the problem. With more than 33,000 lane miles, Missouri has the nation’s seventh largest state highway system, the largest of its neighbors.
If SB 540 becomes law, MoDOT would see approximately $165 million additional dollars per year, which likely would stave off the implementation of the 325 Plan. It would also mean more revenue for cities and counties. For example, Saint Louis City could see almost $4 million more per year to spend on local roads from the passage of SB 540.
Missouri has comparatively low fuel taxes, and low taxes benefit residents. But a well-maintained highway system has benefits of its own. Missourians should consider whether preserving that system is worth paying a little more at the pump.
