Missouri Conference On Transportation Report
On Jan. 23, I attended the Missouri Conference on Transportation in Jefferson City. Much of the talk focused on needs: needs for roads, public transportation options, improved waterways, and most of all, more money. Unfortunately, the remedies put forward to solve the money problem abandon the principle of making the user pay and would keep Missouri’s transportation funding system on the road to unsustainability.
When Dave Nichols, director of the Missouri Department of Transportation (MoDOT), delivered the conference’s keynote address, he focused on his department’s impending financial Armageddon. He stated that from 2005 to 2011, MoDOT had a construction budget of $1.3 billion per year, but this year it has just half that amount. He also claimed that MoDOT requires $485 million simply to maintain the existing system. However, MoDOT will not have even that minimal amount by 2017. The decrease in funds is the result of the declining purchasing power of the state gas tax, decreasing federal support for transportation, and increasing bond payments. The director explained that the $1.3 billion budget had given Missouri better roads, new bridges, and increased safety measures. He pointed out that the department will no longer be able to make such improvements, and soon will be unable to maintain the current system.
The mismatch between MoDOT revenues and obligations did not appear overnight. Since the early 2000s, MoDOT has slowly seen its costs and obligations increase. At the same time, nothing has been done to increase user fees in the form of gas taxes (which has remained at 17 cents since 1996) or tolls. But instead of fixing the problem by raising user fees or controlling costs, MoDOT issued billions of dollars of debt and then relied on federal stimulus funding to improve and expand Missouri’s infrastructure. In effect, Missouri drivers got new roads and bridges without creating the tax base necessary to pay for them. With the bond money spent and the stimulus finished, MoDOT has to live within its means, which apparently it cannot do.
Once again, Missouri has an opportunity to set MoDOT funding on a sustainable, user-pay path. But instead of seizing the opportunity, some speakers at the conference called for a temporary 1-cent transportation sales tax to pay for transportation projects. I have written before that a sales tax is not a good way to pay for roads. Paying for highways based on how much people shop, and not how much they drive, encourages artificially high demand for roads. This increases road degradation, congestion, and sprawl beyond what would occur if drivers had to pay for their roads through gas taxes or tolls. Thus, it guarantees that when the “temporary” sales tax expires, Missourians will face the same funding problems they are facing today. Except then, it will be worse, because the user-generated revenue will be lower and road system maintenance requirements will be artificially higher.
The speakers at the Missouri Conference on Transportation accurately outlined the current condition of transportation funding in Missouri. Unfortunately, their policy solutions would create a system that is not bound by user demand and turns transportation spending into a subsidy slush fund.
