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Economy / Taxes

Finding The Right Way To Fund Roads

By Michael Rathbone on May 26, 2013

The Missouri Legislature did not approve Senate Joint Resolution 16, which would have raised the state sales tax by 1 cent to fund roads and bridges (among other transportation items), to be placed on the ballot in 2014. Missouri House Speaker Tim Jones (R-Dist. 110) has indicated that the issue will be revisited in the next legislative session.

It is important that Missouri maintain good roads and bridges. That is why I support transportation infrastructure spending. SJR 16 was an attempt to do that. However, my colleague, Policy Analyst David Stokes, and I did have misgivings about the proposal. Namely, we thought raising the sales tax to finance transportation infrastructure was not the right way to go.

Raising the sales tax to pay for transportation infrastructure would spread the burden of financing this spending evenly between those who frequently use roads and bridges and those who rarely use them. I don’t think that people who walk to work should have to pay the same amount for road maintenance as those who commute an hour each way.

When possible, and in the case of transportation funding it is possible, the external public costs should be internalized (i.e., linked to those who use the goods). That is why David and I support dedicated funding mechanisms for road construction and maintenance, such as tolling and increased gas taxes. Tolling isn’t a viable option for all of our transportation needs, but it has worked for the Lake Ozark Community Bridge and it can work for other projects. Increasing the gas tax instead of the sales tax would more closely align the act of using the road, bridge, or port, to those who pay for it.

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Michael Rathbone

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