Fuel Taxes Back on the Table in 2016
The tumultuous finale of the Missouri legislature’s 2015 session meant that a fair number of policy conundrums were left unresolved, perhaps none more pressing than budget problems for MoDOT and the State Highway System. Despite warnings that a failure to act jeopardized the condition of Missouri’s most important roads and bridges, last minute solutions—such as an increase to the fuel tax or allowing tolling for major highway projects—failed to pass.
With the 2016 legislative session approaching, there is more hope than ever that Missouri policymakers will focus on stabilizing MoDOT funding. The new Speaker of the House previously indicated that transportation will be a major focus in the next session. This is promising, especially recalling that it was the Missouri House, and not the Senate, that fatally delayed previous bills designed to increase revenue for the State Highway System.
Recently, Missouri legislators began to pre-file bills, and we are already seeing action on transportation funding. Three bills propose to increase fuel taxes. SB 638 would increase regular fuel taxes by 1.5 cents per gallon and diesel fuel taxes by 3.5 cents per gallon. HB 1381 would increase all fuel taxes by 2 cents per gallon. Finally, HB 1581 would increase regular fuel taxes by 7 seven cents and diesel fuel taxes by eight cents.
We’ve argued many times that if Missouri needs more money to maintain highways, these funds should come from user fees like fuel taxes. Missouri’s fuel taxes, which are the main source of state revenue for highways, are the 5th lowest in country. As a general rule, keeping taxes low is excellent for Missouri, but when those taxes are so low that they cannot maintain the highways they were meant to fund, an increase is reasonable.
We’ll continue to keep an eye on these bills, and any others that are introduced, as the legislative session unfolds.