Funding Transportation With A Temporary Sales And Use Tax

Upon the legislature’s and voters’ approval, Missouri Senate Joint Resolution 48 (SJR48) would institute a 1 percent sales tax to fund significant transportation infrastructure investment in Missouri. The tax would expire after 10 years. SJR48 also proposes placing a freeze on the motor fuel tax and prohibiting the state, counties, and municipalities from tolling highways or bridges unless voters give approval.

Missouri needs adequate infrastructure investments. However, the Missouri Department of Transportation (MoDOT), the agency tasked with building and maintaining most of our state’s transportation infrastructure, has an unsustainable funding trajectory. Despite cuts to staff and other costsaving measures, cash available for MoDOT’s construction projects have been cut in half in the last two years, preventing the department from adding any new projects to the State Transportation Improvement Project (STIP). By 2017, the department will not have enough funds to maintain the system as it currently exists, much less improve it. This situation is the result of a gradual erosion of the user-targeted taxes that were designed to fund the majority of Missouri’s transportation infrastructure. The impact is being felt now because stateissued bonds and federal aid allowed necessary investment to temporarily increase. With those short-term funding sources exhausted, it is incumbent on Missouri policymakers to put the state’s transportation funding on a sustainable path. However, a statewide 1 percent sales tax is a highly questionable policy solution. It is economically unsound, fundamentally unfair, and takes Missouri further down the road of unsustainable, taxpayer-subsidized transportation funding.

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