The Cole County Circuit Court struck down the provisions for violating the state constitution because they singled out municipalities in St. Louis County, and in 2017 the Missouri Supreme Court agreed.

The Institute’s Joseph Miller argued at the time the reforms were good news and lamented court rulings throwing them out. He wrote:

This is a disappointing outcome for those hoping that the state’s actions last year might rein in those small cities keeping themselves afloat by turning law enforcement into tax collection. On a hopeful note, the state plans to appeal, and the governor indicated a willingness to work with the legislature on a bill that will pass constitutional muster.

However, there’s now reason to believe the Missouri Supreme Court has reversed its thinking. Per the Post-Dispatch article: “[T]he high court ruled in December in a separate case that the logic underlying its previous decision ‘should no longer be followed.’” As a result, the attorney general is asking the circuit court to partially vacate its prior decision and grant relief from the court’s previous permanent injunction. In other words, the attorney general wants to be able to enforce the caps on raising municipal revenues through citations as envisioned by the 2015 law.

Fees and fines are not the only examples where Missouri’s municipalities have taken advantage of taxpayers. Cities and towns also misuse economic development incentives and special taxing districts, to the detriment of us all. It is good that the legislature acted to protect Missourians in 2015. Hopefully their work then will soon bear fruit.

The post Reining in Missouri’s Municipalities appeared first on Show-Me Institute.

A few proposals to fund I-70’s reconstruction have emerged in Jefferson City this legislative session. One bill, SJR 3, would raise fuel taxes by just a few cents (1.5 cents/gallon on gasoline, and 3.5 cents/gallon on diesel fuel) , and is estimated to generate $57M a year for MoDOT and $24.5M for local governments to spend on roads. Another bill, HB 155, would allow the Missouri Highways and Transportation Commission (MHTC, which oversees MoDOT), to receive proposals from the private sector on the rebuilding and eventual tolling of Interstate 70. Both proposals focus on increasing user fees, which directly tie the funding of roads to the consumption of roads.

Another bill, SB 457, takes a different approach. SB 457 would, for 10 years, divert 8% of state sales and use tax proceeds away from the general fund to a newly established “Interstate 70 Improvement Fund.” Most of those funds, averaging $250M a year, would go towards reconstructing and expanding I-70 to four lanes each direction. SB 457 would generate enough revenue to rebuild and expand I-70, but the question arises: Are sales and use taxes appropriate sources of revenue for transportation investments? The answer isn’t so clear.

For one thing, it isn’t necessarily fair to force people who don’t use I-70 to pay for it. Should a working-class family in Cape Girardeau have to pay for an interstate they’ll never drive on? Should someone who doesn’t drive at all pay for the interstate system? Moreover, basing highway funding on sales and use tax revenue could lead to unintended economic consequences. As former Show-Me Institute Policy Analyst Joseph Miller put it, “If people pay for roads and bridges based on how much they shop and not how much they drive, it will make driving look comparatively cheap, pushing people to drive more at any gasoline price, thereby increasing congestion, pollution, and urban sprawl.” In short, by socializing the cost of roadways through general taxation, people will drive more than they usually would, creating negative externalities that a user fee-based system could internalize.

It’s also worth asking whether diverting general revenue, which funds public safety, education and other important services, is the best policy option at a time when the state is making budget cuts. If general revenues are used to fund interstate improvements, could that mean services traditionally funded with general revenues will be scarcer? It’s hard to know, but policymakers would be wise to consider possible consequences before shifting funds away from other areas.

In 2014, Missourians soundly rejected a transportation sales tax hike. Perhaps that, if anything, is a signal that Missourians don’t want their shopping patterns dictating their roadway funding.

The post Should Sales and Use Taxes Fund Interstate Improvements? appeared first on Show-Me Institute.

For a thorough analysis of the current state of Missouri's highway system and the challenges it faces in the near future, check out Joseph Miller's new Policy Study, Funding the Missouri Department of Transportation and the State Highway System.

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For a thorough analysis of the current state of Missouri's highway system and the challenges it faces in the near future, check out Joseph Miller's new Policy Study, Funding the Missouri Department of Transportation and the State Highway System.

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For a thorough analysis of the current state of Missouri's highway system and the challenges it faces in the near future, check out Joseph Miller's new Policy Study, Funding the Missouri Department of Transportation and the State Highway System. 

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For a thorough analysis of the current state of Missouri's highway system and the challenges it faces in the near future, check out Joseph Miller's new Policy Study, Funding the Missouri Department of Transportation and the State Highway System.

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20150710 – Testimony – Rams Stadium – Miller.pdf

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Show-Me Institute Policy Analyst Joseph Miller talks about funding Missouri roads with user fees like fuel taxes.

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