Missouri’s roads are often a mixed bag. Urban areas, such as Kansas City and St. Louis, face heavy traffic loads that strain infrastructure, while rural areas contend with neglect stemming from budget limitations. Harsh weather conditions further exacerbate the wear and tear, leaving many roads riddled with potholes and cracks. Rural highways critical for agriculture and trade can quickly deteriorate without sustained investment.

A recent post by the blog Construction Physics contained a chart depicting the road quality of the top 19 cities. It depicts the percentage of non-interstate roads at different quality levels, measured by the International Roughness Index (IRI) and tabulated by the Bureau of Transportation Statistics and Federal Highway Administration (FHWA). I’ve added St. Louis and Kansas City for comparison using the same scoring system.

Missouri’s interstates, whose standards and funding largely come from the federal government,  rank 15th out of 50th according to the IRI score. But our non-interstate roads rank 32nd, behind our neighboring state of Kansas (1st) but well ahead of Illinois (37th). Kansas has earned a reputation for relatively well-maintained highways, thanks to strategic funding and regular maintenance schedules. Illinois has committed significant resources to upgrading its aging infrastructure through recent legislative initiatives.

Importantly, both Kansas and Illinois employ toll roads to fund road maintenance. Missouri should, too. Show-Me authors have written extensively on tolling and road maintenance more generally. While Missouri recently increased its gas tax, it’s too soon to know how impactful it will be.

Improving Missouri’s roads requires more than patchwork solutions. Lawmakers and transportation officials must focus on sustainable funding mechanisms, better prioritization of projects, and more efficient use of resources. Policies that balance the needs of urban centers and rural areas will be critical in ensuring that all Missourians benefit from reliable roadways.

The post Kansas City and St. Louis Road Quality appeared first on Show-Me Institute.

• A recap of the legislative session
• Missouri falling further behind on school choice
• Missouri’s expanding welfare state
• Property taxes
• The failure of open enrollment legislation

Click here to find the newsletter.

The post Show-Me Institute’s June 2023 Newsletter appeared first on Show-Me Institute.

For example, large trucks cause between 15 to 49 times more damage to Missouri’s roads than cars do. Yet, the largest source of state road maintenance revenue comes from the motor fuel tax, which is levied at the same rate for both large trucks and other vehicles.

This report looks at various ways in which the financing of road maintenance could be reformed so that the amounts that truck-owners and car-owners pay are better aligned with the amount of damage their vehicles do to the roads. In addition to fuel taxes, tolling and other road usage charges are discussed.

Click here to read the full report.

The post Who Pays for Road Maintenance appeared first on Show-Me Institute.

There haven’t been many silver linings to the COVID-19 pandemic, but one is the rapid growth of telemedicine services. Of course, the ability to see your healthcare provider from the comfort of your own home was available prior to 2020, but various laws and regulations kept the service from becoming a popular option. But once the pandemic began and most of the unnecessary barriers were waived as part of Missouri’s response to the virus, the service surged in popularity.

Now that the pandemic is receding and telemedicine is much more popular, Missouri’s legislature needs to act to allow the service’s growth to continue.  As I wrote a few months ago, state statutes need to be changed to allow health care providers to more easily write prescriptions for patients they’ve seen remotely. It should also be easier to establish a doctor–patient relationship remotely. While telemedicine may not be the answer to every health problem, it’s clear the service provides tremendous value in many circumstances, and government should not stand in the way.

As we near the end of the 2022 legislative session, lawmakers now face the tough task of deciding which bills will or won’t make the cut this year. I hope our elected officials act on what was learned over the past two years (besides how to spend more taxpayer money than ever before) and permanently enshrine the COVID-era telemedicine access provisions into law.

The post Missouri Missing Telemedicine Opportunity appeared first on Show-Me Institute.

My brain tells me that the entire Amtrak subsidy should be eliminated. If Amtrak can’t stand on its own, then why should taxpayers subsidize it to such a large extent? There are numerous ways to get across Missouri, including cheap flights and busses for those who don’t drive.

My heart tells me that there is nothing wrong with compromise in politics, and I think the current compromise to fund Amtrak enough to guarantee one trip per day is a good one. In the past, I have argued in support of a limited subsidy for passenger rail service across Missouri. I do believe it is important to have that alternative provided. We subsidize all types of transportation, including cars. There is a public good aspect to having a variety of transportation options available to people.

MODOT released a study several months ago purportedly in support of the service:

The lawmakers set the figure in May, about the time an executive summary of a state-commissioned Cambridge Systematics economic impact study revealed that the four trains each day provide $208 million in annual economic activity, and more than $22 million in tax revenue Missouri would not see if the Runners didn’t run.

I have to be honest here. I don’t believe those numbers; not in the slightest. Like similar studies, this one makes use of exceedingly generous statistics. From the summary of it available online (emphasis added):

Amtrak’s . . . spending in Missouri yields the following direct, indirect and induced economic benefits….

The key words are “indirect” and “induced.” The authors of the study are likely using a robust and flawed multiplier to make assumptions about the tax revenue and economic activity that don’t withstand scrutiny.

Beyond those issues, some of the arguments in favor of a larger subsidy and two trips a day are simply weak (from the St. Louis Post Dispatch article linked at the top of this piece):

Tammy Bruckerhoff, the tourism and economic development director for Hermann, said the line is vitally important to draw tourism to the smaller towns along the route.

There are hundreds of small towns in Missouri. I fail to see why a half dozen of them along the Amtrak route deserve a subsidy for their tourism efforts, which mostly revolve around bacchanalian celebrations of excess (which are awesome, I admit). Do we subsidize Party Cove in Lake of Ozarks? I sure hope not (also, we don’t).

$10 million a year is a generous subsidy to keep Amtrak running in Missouri, and a compromise that I can live with in this debate. A larger subsidy is not warranted. There is no evidence that two trains per day in each direction will accomplish anything more than spending another $2.5 million (at least) in taxpayer money. You can’t wish market demand out of thin air, whether it’s for a trolley, a streetcar, high-speed rail, or Amtrak.

The post Brain Versus Heart on Amtrak in Missouri appeared first on Show-Me Institute.

The post Public Comments Regarding the Funding of High-priority Transportation Needs appeared first on Show-Me Institute.

Susan Pendergrass, Patrick Ishmael and David Stokes discuss a new report that claims Missouri ranks 49th in K-12 education funding, Property Reassessments and Upcoming Property Tax Hike Votes, new TIF deals around the state and the call from some Missouri legislators for a special session on public safety.

More ways to listen:

Apple Podcasts

The post Podcast: Missouri Education Spending, More Corporate Giveaways and Talk of a Special Session on Public Safety appeared first on Show-Me Institute.

Every toll road I drove on was tolled 100 percent electronically—there was no option to pay with cash. My rental car was equipped with a transponder that registered with overhead sensors when driving through a checkpoint. Cars that didn’t have a transponder would have their license plate photographed and a bill sent to them in the mail. Drivers without transponders paid higher rates to reflect the higher administrative costs of physically mailing bills rather than deducting money from an online account.

Toll rates vary by vehicle type and number of axles. The more axles on your vehicle, the higher the toll. Rates also vary by the location of the road. The higher the cost of maintaining the road, the more drivers pay for its use. And while I did not use it on my trip, the Florida Turnpike’s website has an online map that lets drivers calculate the cost of tolls on their trip based on the exact route they plan to take.

Florida’s all-electronic toll roads are the future of tolling. Drivers don’t need to stop and start at every checkpoint, nor do they need to constantly remember to carry cash. Missouri has heavily traveled highways that need rebuilding (page 18), and tolling is a responsible way to raise the money needed to get them back in good shape. It wouldn’t be easy to establish toll roads in Missouri. There are a number of legal hurdles that would make implementing tolling in Missouri a challenge, and voters have been reluctant to accept their use.

But if Missourians knew how easy it is to drive on modern toll roads, they might be willing to give tolling a shot.

The post Missouri Can Take a Lesson From Florida’s Toll Roads appeared first on Show-Me Institute.

In addition to a 17-cent-per-gallon state fuel tax, Missourians pay federal fuel taxes on gasoline and diesel fuel of 18.4 and 24.4 cents per gallon, respectively. This federal fuel tax revenue is deposited into the Federal Highway Trust Fund (HTF), from which money is sent to each state—and money from the federal government is the largest part of the Missouri Department of Transportation’s road and bridge budget. In 2020, MoDOT received almost a billion dollars from the HTF, making up nearly 40 percent of MoDOT’s road and bridge budget. In fact, for every $1 that Missouri drivers contribute to the HTF through federal fuel taxes, MoDOT gets $1.21 back. Obviously, it’s in Missouri’s best interest to keep the HTF healthy.

But the HTF isn’t looking so good these days, because its mechanism for generating revenue hasn’t aged well. Fuel taxes are charged by the gallon rather than as a percentage of the purchase price, so they don’t automatically keep up with inflation. The price of gas has gone up a lot since 1993, but regardless of whether you paid $1.25 or $2.50 per gallon during that time, the federal tax on each gallon has been stuck at 18.4 cents (or 24.4 cents for diesel fuel) for the past 28 years. Meanwhile, inflation has increased all the costs associated with road maintenance and repair. Worse yet, the costs of road construction equipment and materials have risen faster than overall inflation. As a result, each dollar raised from the fuel tax now has one third of the purchasing power it had in 1993.

In theory, a per-gallon fuel tax can still bring in increasing revenue over time as more drivers hit the road and log more miles every year. This is exactly what would have happened, except that improvements in vehicle fuel efficiency (not to mention the advent of electric cars) have decreased the amount of gas we buy for each mile we drive.

So where does that leave us? Fuel tax revenue is no longer sufficient to cover the HTF’s expenditures, and Congress has resorted to transferring money from the general revenue fund just to keep the fund solvent. This is at best a short-term fix that doesn’t solve the HTF’s core problem, adds to the national debt, and should hardly make Missourians feel comfortable. The fund we depend on for almost 40 percent of our road and bridge budget can’t support itself anymore. Up to this point, the federal government has covered the shortfall, but can we count on that to continue?

At the federal level there appears to be some recognition of the problem. A bipartisan group of 58 members of Congress has proposed indexing the federal fuel tax to some combination of inflation, construction costs, and fuel efficiency to keep it current with the times. The exact mechanism for the indexing hasn’t been determined, but the proposal is a promising start. Perhaps of more interest to Missourians is that several states have already indexed their own fuel taxes to measures like these. Policymakers here should consider indexing our fuel tax as well, since state fuel tax revenues have stayed practically the same for the last 17 years.

If we believe that quality roads and bridges are important for Missouri’s economy, then it makes no sense to allow the funding source that pays for them to remain stuck in the past.

The post Indexing Fuel Taxes appeared first on Show-Me Institute.

Instead of raising the fuel tax by 2 cents per gallon each year for five years, the bill would raise the fuel tax 2.5 cents per gallon each year for five years. If it were to become law, Missouri’s fuel tax would be raised from 17 cents per gallon now to 29.5 cents per gallon in 2025. The bill’s sponsors estimate that, once the increases are fully phased in, these measures would raise an additional $462 million per year starting in 2026.

The tax increase would eventually cover a little more than half of the annual $745 million MoDOT claims it needs for high-priority road and bridge needs. Increased transportation funding is needed, Show-Me analysts and other organizations have pointed out.

There’s another new wrinkle added to the bill: residents can claim an exemption and refund for the additional tax amounts they paid as a result of the fuel tax increase. This exemption would only apply to vehicles that weigh less than 26,000 pounds, effectively ruling out commercial trucking companies from receiving the refund. The recordkeeping and reporting requirements for the exemption and refund are onerous particularly if you have more than one vehicle. Under the current draft of the legislation, the claim for a refund shall at a minimum include:  (1) Vehicle identification number of the motor vehicle into which the motor fuel was delivered; (2) Date of sale; (3) Name and address of purchaser; (4) Name and address of seller; (5) Number of gallons purchased; and (6) Number of gallons purchased and charged Missouri fuel tax, as a separate item.

It’s hard to know how many Missourians would take advantage of this refund mechanism, but available evidence suggests that most won’t. The fuel tax refund is modeled after South Carolina’s fuel tax rebate, and only $3.4 million in rebates were issued out of over $500 million raised.

Perhaps the most interesting change is that the bill would establish an Electric Vehicle Task Force to study how to ensure drivers of electric vehicles (EVs) adequately pay for the damage they cause to roads. As more people use EVs and don’t fuel their cars with gasoline, this will become a salient question for future legislation. The task force would also study how the charging of EVs will impact the state electric system, the role of utilities and the Public Service Commission in overseeing charging stations, and ensuring that electric customers without EVs don’t end up subsidizing those who do.

The bill still faces another vote in the Senate, so things could change once again. Hopefully, we see a final bill that addresses transportation funding issues in Missouri in a fair and equitable way.

The post Gas Tax Bill Undergoes Several Changes appeared first on Show-Me Institute.

With fuel tax revenue in a years-long stagnation and transportation revenues uncertain in the COVID-19 work-from-home era, P3s can be useful for funding big transportation projects. P3s are arrangements between a government agency and a private company to partner on a project’s financing, construction, and operation, typically through a long-term agreement. A big advantage of P3s is that investors can finance large projects upfront, rather than waiting for state transportation budgets to get back to normal.

P3s have other benefits. Because a company is responsible for road maintenance for, say, 30 years, it has an incentive to minimize costs over the long run. In contrast, state governments often have an incentive to minimize initial payments or upfront costs in order to make tax hikes or bonds more politically palatable.

Many states have turned to P3s to finance and operate road infrastructure improvements.

Toll road P3s shift the risk of generating enough revenue from the state government to the private sector. Moreover, by relying on tolls rather than existing state revenue sources, toll road P3s open up a new funding stream for road improvements and maintenance. P3s enable the private sector to offer toll-financed solutions where there isn’t a tolling agency or the political will to establish one.

P3s also avoid adding new state debt or liabilities. The toll road company is on the hook for future maintenance obligations, and the state can terminate the contract if the company does not hold up its end of the bargain.

The benefits of using P3s for toll-financed road improvements should prompt Missouri policymakers to reexamine Missouri’s P3 laws. Currently, P3s can be used for a range of infrastructure projects, but not toll roads. Several bills have been introduced in recent years that would change this, but none have passed. Perhaps falling fuel tax revenues and uncertain transportation budgets will encourage policymakers to reconsider.

The post How Transportation Public–Private Partnerships Can Benefit Missourians appeared first on Show-Me Institute.

Few would have guessed what 2020 had in store for us, and fewer still need the challenges of last year recounted in detail. Missourians have faced threats to our health and to our democracy, to our communities and to our safety, and indeed to the health and continuity of our social and political institutions. Missourians rose to meet these challenges—challenges often imposed by their own state and local governments—and they succeeded in spectacular ways. Yet there are more obstacles to overcome, more work to do, and more reforms to pursue.

Indeed, great progress can happen in the face of great adversity. With this in mind, we offer our own “State of the State” today, looking backward not only at what Missouri was and has been, but forward with hope to what it is and still could be.

The coronavirus pandemic of 2020 was the biggest story of the past year, and the public education system’s response led to many of the state’s most severe and costly policy failures. And yet, most of the problems in Missouri’s educational system were only aggravated by the pandemic, not rooted in it: the lack of transparency and accountability throughout the educational system, and especially at the State Department of Elementary and Secondary Education (DESE); the inflexibility of the public school system, revealed in its inability to meet the individual needs of students; and the state’s failure to lead or even to follow other states in expanding charter schools and school choice.

The evidence is clear: wholesale reform must come to Missouri’s public schools. In the 2018–19 school year, less than half of Missouri students tested were proficient in Math and Language Arts. On the National Assessment of Educational Progress (NAEP)—a Congressionally mandated nationwide assessment of education systems in America—Missouri 4th-graders have dropped from the top half of the country for reading and math in 1996 to the bottom half today.

These failures didn’t happen all at once, but 2020 forced the problems into the spotlight. Today, 27 percent of parents report that they feel their children are now behind academically, compared to less than 7 percent before last year. Nearly 3 in 10 parents no longer trust their public school system to make decisions that are in the best interest of their children’s education.

Facts matter, and the fact that Missouri parents are losing faith in Missouri schools should alarm policymakers.

How will Missouri meet this challenge? Now more than ever, it is critical that the legislature provide all Missouri students and their families with choices for their education. Parents must have the opportunity to educate their children in other ways if they believe traditional district education is failing them.

To deliver on its education promises to parents and children, the state must pass three key reforms.

First, the state must create education savings accounts (ESAs) that give parents flexible access to a portion of their children’s public education dollars that can be used for other educational resources better tailored to their children’s needs.

Second, the state must unleash the power of charter schools by removing restrictions that unduly restrict their creation and by implementing school choice reforms, like Missouri Course Access (MOCAP), that are already the law. Specifically, the state must designate MOCAP as an independent local education association or charter school and get districts out of the equation.

And third, DESE must finally be the adult in the room and hold schools and districts accountable for what they have and have not done throughout this pandemic.

Especially in districts that have been unable or unwilling to reopen for traditional learning, parents and kids must have the opportunity to go elsewhere to ensure their educational needs are met. These three reforms would help meet not only the challenges of the pandemic today, but the challenges of the modern economy for years into the future.

At the core of the pandemic has been, of course, a health care crisis, and fortunately some headway was made last year in the face of these health care challenges. Thanks to the hard work of Rep. Derek Grier and the support of other public officials and stakeholders, Missouri took an important step in 2020 and removed licensing barriers that prevented out-of-state licensed professionals of all kinds, and health care professionals in particular, from readily providing services to Missourians. Moreover, Gov. Mike Parson acted wisely in ordering the relaxation of the state’s telemedicine and scope-of-practice regulations to better meet the needs of medical management in response to the pandemic.

These supply-boosting measures should be made permanent this year, and they should be the starting point for other necessary reforms. Along with making permanent the state’s telemedicine and scope-of-practice reforms, legislators must repeal Missouri’s certificate of need law, which unnecessarily caps hospital competition in the state, and they should take steps to deregulate health insurance to ensure that Missourians have ample choice and reasonable pricing in their health insurance products. Further, Medicaid will pose a policy and budgetary challenge to the state in the years ahead; legislators will need to work earnestly to mitigate its damage to other state priorities.

Damage to the state economy can happen in other ways, too, and nowhere is this more clear than in the condition of Missouri’s roads. Missourians depend on our roads to get to their jobs and to get their children safely to school; indeed, Missouri relies heavily on transportation for economic growth. Transportation and warehousing businesses employ over 83,500 Missourians, and over $700 billion of products travel over Missouri’s roads and bridges each year. These numbers are only expected to rise, and we cannot let an asset as important as our roads deteriorate through neglect.

Unfortunately, the Missouri Department of Transportation, or MoDOT, says it only receives a little more than half of the revenue it needs to maintain Missouri’s roads and bridges, both now and in the future. Notably, Missouri’s gas tax has not been raised since 1996 and is currently the second-lowest in the country. Toll roads, which work for Missouri’s neighbors, are an option that should also be considered here. Increasing user fees—to make sure that those who use the roads pay for them—is the fairest and best answer to address Missouri’s infrastructure funding problems.

Yet not all state “needs” for revenue are created equal. While increases to user fees in transportation might happen without a tax reduction elsewhere to help resolve MoDOT’s structural funding problems, that carveout from the principles of revenue neutrality and overall tax reform should be an exception, not the rule.

For instance, Missouri remains one of a dwindling number of states that does not require a sales tax on all out-of-state purchases. While proponents suggest, reasonably, that instituting the tax would “level the playing field” for local businesses, it also would increase the tax burden on the people of Missouri. Businesses don’t pay these taxes; Missouri’s families do.

Accordingly, the discussion about a new internet sales tax should start with revenue neutrality as its goal. No time is a “good time” for tax increases, and legislators should not think that hiking taxes as a way to generate new revenue during a pandemic and economic downturn is “good timing.” Taxes should sustain services, not backfill shortfalls, and the state should not impose new taxes on suffering families to solve its temporary, though difficult, budget problems.

And while legislators are “under the hood” of the state’s sales tax system, they should advance an array of other important sales tax reforms.

Those reforms should include a sales tax cap that puts a limit on how many layers of local taxes can be piled on Missouri consumers; the repeal of dining taxes; the reform of special taxing districts so that such projects can’t be used as fiefdoms of the private sector backed by the taxing power of government; and the movement of tax increase votes to November elections to ensure the will of residents is best represented in these elections.

But if state government really wants to help smaller retail businesses—to “level the playing field,” as we’re told internet sales taxes would do—it should start outside the realm of tax policy, by protecting Missouri businesses from the sorts of destructive, asymmetric lockdown orders that have crushed countless entrepreneurs across the state during this pandemic. We see no reason based in public health for allowing casinos to offer blackjack at all hours of the day while restaurants can’t offer dining; nor do we understand why, if Walmart can continue to sell shoes, competing shoe stores cannot also remain open.

No doubt, government officials have had to make hard choices, but they shouldn’t make those choices on the back of small business and to the benefit of their larger corporate competitors.

At the Show-Me Institute, we advance government policies that expand freedom and enrich the lives of our citizens. We also recognize the obstacles erected by special interests inside government itself that, unfortunately, can stand in the way of the public interest. Whether called rent-seeking, cronyism, or soft corruption, such barriers to freedom and the free market are wrong and must be fought at every turn. We’re happy to continue this fight on behalf of Missouri taxpayers.

In closing, here in her 200th year as a state, we’re happy to report that Missouri is strong and her citizens are resilient.

But she can be made stronger and more resilient. Much remains to be done, whether in education, or health care, or transportation, or taxation, or the fight against cronyism. We are more determined than ever to continue our efforts to make our state better, hold our leaders accountable, and offer greater freedom and a better life to our fellow citizens.

The post 2021 Show-Me Institute State of the State appeared first on Show-Me Institute.

Both bills would place the question of raising the gas tax before Missouri voters. One would require a statewide vote to change Missouri’s current law regarding fuel tax rates, and the other would require a statewide vote to enshrine the new fuel tax rates in Missouri’s constitution. Missouri’s fuel tax has remained at 17 cents per gallon since 1996, and a 10-cent increase today would roughly adjust it for inflation since then. However, the full 10-cent increase under these bills would not be in place until 2026, and we can expect further inflation during the extra five years. Still, if our gas tax is five years behind inflation in 2026, that would be an improvement over the current 25-year gap.

The extra funds would provide a boost for Missouri’s roads. The Missouri Department of Transportation estimates that roughly $745 million in high-priority road and bridge repair and maintenance go unfunded each year. The most recent proposal in 2018 to increase fuel taxes by 10 cents per gallon was estimated on the ballot to raise an additional $400 million each year for road and bridge maintenance. The current proposals would likely reach this mark after the full 10-cent per gallon increase is reached after five years.

While voters have rejected fuel tax and road-dedicated sales tax increases in the past decade, research suggests that voters may now be amenable to increasing fuel taxes. A recent report from the Missouri Chamber of Commerce found that 85 percent of Missourians believe more money should be directed to road maintenance.

Specifically, drivers were asked about their support for a 10-cent fuel tax increase to repair Missouri’s roads. The report found that 45 percent of drivers support such a fuel tax increase, but when respondents were informed that it would cost an average driver $5 extra per month, 51 percent supported raising the gas tax 10 cents and adjusting its 1996 levels to current costs.

Ultimately, both fuel tax bills would have to navigate the Missouri Legislature before reaching voters, but the recent support may be the extra boost they need.

The post New Gas Tax Bills Highlight Missouri’s Transportation Needs appeared first on Show-Me Institute.

Missouri is considered one of the most “conservative” of the 50 states. Is that a good thing or a bad thing? It depends on how you define the word.

Over the past several decades, Missouri has been going downhill both economically and educationally—as one of the worst-performing states in GDP growth and educational achievement in K-12 public education. Why?

Too often, Show-Me State conservativism has been characterized by a lack of urgency and a satisfaction with the status quo.

As I would define it, conservatism does not begin and end with the preservation of existing institutions, and it most definitely is not about protecting the privileges of the rich by exploiting the poor or being indifferent to the problems of the needy. Where it begins is with the desire to protect and enlarge freedom for all members of society—enabling people to work and live lives of their own choosing so long as they do no harm to others in the pursuit of their own betterment.

Here, then, are five New Year’s Resolutions for leaders in local and state government:

#1: Improve Missouri’s competitiveness; turn the Show-Me State from an economic sluggard into a great place to live, work, and own or operate a business. That means lowering taxes—leaving more money in people’s pockets to spend or invest as they choose. It also means removing obstacles to commerce and opportunity posed by excessive licensing and regulatory requirements.

#2: End crony capitalism—stop providing subsidies and tax carve-outs for politically favored businesses that are not available to all other businesses. In 2019, Missouri reported 524 tax-increment financing (TIF) projects from 100 political subdivisions across the state. These projects are anticipated to have $10.1 billion in TIF-reimbursable project costs. Such subsidies drain money from public services and have a bad track record of failing to deliver promised job, investment, or economic growth. Reductions in tax incentives and spending can provide some of the budgetary space to lower or eliminate individual income and earnings taxes.

#3: Don’t treat small, owner-operated businesses as the designated fall-guys in government-ordered lockdowns—calling them “non-essential” businesses while allowing their big-box counterparts such as Wal-Mart and Target to continue to operate.

#4: Don’t be penny-wise and pound-foolish when it comes to taking care of essential infrastructure on a timely basis. Interstate 70, an economic and transportation lifeline, is falling apart. Numerous other major roads are badly in need of repair. Travel on Missouri’s roads has increased by 12 percent since 2008, but the state’s transportation budget has fallen by 15 percent. According to Missouri’s Department of Transportation, it now gets only enough revenue to cover a little more than half the state’s needed road and bridge repairs. One thing is certain: Postponing needed maintenance on long-lived assets such as roads and bridges is not a smart idea. It leads to escalating costs and catastrophic failure.

#5: Expand educational choice for students and families at all income levels throughout the Show-Me State. There is no worse example of blind allegiance to the status quo than Missouri’s K-12 public education system.

Supported by nominally conservative lawmakers, the state’s educational establishment—meaning school superintendents, teachers’ unions, and DESE (Missouri’s Department of Elementary and Secondary Education)—have blocked almost every initiative aimed at expanding school choice from vouchers and education savings accounts to expansion of charter schools. Despite a long record of poor results in the so-called “Nation’s Report Card,” members of the establishment continue to oppose all forms of competition and choice in public education.

And who is hurt the most by this self-serving obstinacy on the part of the providers of public education? It is of course the users: students and their parents and families, and most especially lower-income families trapped in non-performing schools who cannot afford to move to other school districts or to private schools.

As I see it, true conservatism is really about an allegiance to principles—and to enduring values such as freedom, hard work, and equality under the law—rather than an allegiance to the status quo.

The post Five New Year’s Resolutions for Missouri Lawmakers appeared first on Show-Me Institute.

Missouri’s gas tax—MoDOT’s largest in-state funding source—has not been adjusted since 1996.  Inflation, the rising costs of road maintenance, and increasing vehicle fuel economies have all lowered the value of the static gas tax over time.

However, many states have found ways to keep their gas taxes in line with changing times.

For instance, numerous states have indexed their gas taxes to inflation to keep gas tax levels in step with the rest of the economy. Some states index gas taxes to other metrics. For instance, North Carolina’s gas tax is indexed to account for changes in the state’s population, as well as for inflation. Nebraska’s gas tax adjusts based on a combination of the state transportation budget and a tax that varies based on the price of fuel. Georgia’s gas tax is indexed to vehicle fuel efficiency to keep up with auto industry advances. Other states apply the state sales tax to gasoline on top of a base cents-per-gallon rate, so that the total fuel tax revenue collected varies with the price of fuel.

In other states gas tax increases are revenue neutral, a point which is worthy of consideration, especially this year. South Carolina is in the process of increasing its fuel tax in two-cents-per-gallon increments over six years. However, residents can write off the extra gas taxes paid at the pump from their income taxes. This essentially restructures where the taxes go, as residents don’t necessarily pay more taxes, but more of the taxes they pay go toward transportation.

Lawmakers have already proposed measures to raise Missouri’s gas tax by 10 cents per gallon over five years in the new legislative session. And while gas taxes are not a perfect solution, as they do not always align road usage and damage to payment for their upkeep, they are one option. And as evidenced by other states, Missouri policymakers have options as to how to approach this problem.

The post Gas Taxes Around the States appeared first on Show-Me Institute.

But if generating an extra $745 million in revenue is what it would cost to keep our roads in good shape, what is it costing Missourians not to do so?

There are a few ways to look at this. From a road maintenance perspective, delaying needed road repairs results in paying more to fix them in the future. This is because road quality decays faster each year it is left untouched. A study from the Cornell Local Roads Program found that $1 spent to keep a road in good condition can save spending $4 to $5 in future repair costs (page 30). Other estimates put this ratio even higher at $1 now versus $5 to $15 later.

From a driver’s point of view, delaying road repairs results in drivers paying more money to take care of their cars. Roads in poor, mediocre, or fair condition present problems to drivers through potholes, rutting, or rough surface quality. The drivers, in turn, pay the price for this through additional vehicle repair costs, increased fuel consumption, and increased tire wear. MoDOT estimates that Missouri’s current road conditions cost an average driver $59 per month, and all drivers statewide $3 billion per year. While the methods for calculating these numbers may be debatable, what is not in question is that rough roads cost drivers money.

Delaying needed repairs on Missouri’s roads is a costly proposition. Kicking the can down the road may be the easiest decision, but it’s Missourians who end up paying both now and later.

The post The Cost of Not Maintaining the Roads appeared first on Show-Me Institute.

According to the most recent data from 2011, roughly $711 billion worth of freight crosses Missouri each year, and this is projected to increase to $1.2 trillion by 2030. More than 83,500 Missourians work transportation and warehousing jobs, and more than half of Missouri’s economy is affected through freight movement or systems.

However, according to a new study by the Missouri Chamber of Commerce, this vital part of Missouri’s economy is in danger of falling into disrepair. Missouri’s transportation infrastructure, specifically roads and bridges, is aging rapidly. Traditional methods of funding are inadequate to maintain current systems, let alone provide enhancements.

Missouri’s fuel tax of 17.4 cents per gallon has not been raised since 1996. Due to inflation, 17 cents then are worth 8 cents now. Additionally, vehicle registration fees were last increased in 1980, and a dollar in 1980 is worth about 30 cents today. Together, these two revenue sources make up nearly 40 percent of the Missouri Department of Transportation’s total road budget (and 65 percent of in-state revenue, once federal reimbursement is considered). As a result, $745 million in high-priority road needs go unfunded each year.

According to the Chamber of Commerce report, this funding crisis “is the biggest roadblock preventing the state from reaching our logistics potential.”

To start closing the gap in Missouri’s road funding, the Chamber of Commerce report recommends exploring tolling and also indexing the state fuel tax and registration fees to inflation. These measures would help keep funding sources up to date in terms of purchasing power and start to close the funding gap as well as keep a “user pays” principle.

While these methods are not always the best ways to match road damage to payment for upkeep, they are the type voters were most inclined to consider. Public opinion surveys of Missouri voters conducted for the report revealed that 57 percent support highway express lanes, akin to tolling individual lanes, although tolling proper received lower (40 percent) support. Fifty-one percent of voters support increasing the fuel tax, while 47 percent support raising registration fees. Mileage-based user fees can be effective, but only 24 percent supported the idea. Despite the different levels of support for different funding methods, 85 percent of Missouri voters agreed that Missouri needs more funding for transportation infrastructure.

Missouri’s roads are an economic asset that support jobs across the state. Making sure we have the money to keep them in good shape—while ensuring those who use them pay for them—is something policymakers need to address.

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Missouri’s road maintenance funding is on a road to nowhere.

Interstate 70, Missouri’s economic and transportation lifeline, is falling apart. Many other roads Missourians travel on each day also need to be fixed, and they too will continue to deteriorate because the Missouri Department of Transportation is running out of money.

While travel on Missouri’s roads continues to increase (up 12 percent since 2008), MoDOT’s budget has been headed in the opposite direction (down 15 percent in the same period), and that has resulted in a whopping $745 million in unfunded road transportation needs.

MoDOT remains heavily dependent on the state fuel tax (17.4 cents per gallon) for road maintenance, and that’s part of the problem. Because of the improved fuel economy of today’s gas and diesel-powered cars and trucks, fuel tax receipts have declined even though people drive more and put more wear and tear on the roads. Furthermore, drivers of electric vehicles are paying significantly less for road maintenance because they aren’t paying fuel tax.

It’s time to rethink transportation funding. The damage inflicted upon roads is determined by how much drivers drive on them and how much their vehicles weigh, not by how much fuel they consume. A better way to match the damage drivers do to the road with what they pay for its upkeep is to charge by the mile, instead of by the gallon.

Several states experimenting with road-usage charge programs demonstrate how such programs could be implemented. One method to record mileage is by a simple odometer reading. Drivers could self-report their odometer readings as part of the annual vehicle registration process or by plugging a recording device into the vehicle’s diagnostics port. While this method would pose no threat to driver privacy, it would be impractical for those who frequently drive out of state.

A more controversial method is to record precise in-state miles driven by using GPS technology. Current programs in Oregon and Utah use third-party providers to record in-state mileage either through a GPS-equipped plug-in device or a smartphone app. In both cases, the state receives the total miles driven for billing purposes with no location data.

While this poses more concerns for driver privacy, it should be noted that GPS satellites do not track locations. GPS responders, whether in plug-in devices or cell phones, track their location in relation to satellites, but do not necessarily share their location with those satellites. Protecting driver privacy is a serious concern, and the reporting of personal or location-specific data should only be allowed when explicitly agreed to by drivers.

With these first two methods, as drivers pay for their miles driven, they are reimbursed for the gas taxes they paid to travel those miles.

A third method is to use electronic tolling to raise maintenance funds specifically for heavily traveled highways, as many states already do. Drivers can use transponders that send a signal that is picked up at certain points along the road, and payments can automatically be deducted from that driver’s account. Those with concerns about the privacy implications wouldn’t have to opt for a transponder. Instead, cameras on the highway could record their license-plate number and a bill could be mailed based on their driver registration information.

No system is perfect, but in each of the examples listed above, drivers can choose their method of payment and are presented with several options depending on their privacy concerns.

In any case, our current system of taxing fuel usage is becoming less viable. Missouri policymakers should consider solutions already in use in other states to move Missouri’s transportation funding methods in the right direction.

The post Commentary: Funding Roads by the Mile, Not the Gallon appeared first on Show-Me Institute.

The Tax Foundation study focuses on funding for America’s highways, and how road usage has been growing while the revenue to maintain them has been shrinking. This is true nationwide and for Missouri.

The bulk of Missouri’s highway funding (and that of many other states) comes from the federal Highway Trust Fund—which is funded by a federal fuel tax that has not changed since 1993. The tax is levied on vehicles that are increasingly fuel efficient. State fuel taxes supplement the federal funding; each state approaches its fuel tax differently. Some index the tax to inflation, some periodically raise it, and still others keep it constant, as Missouri has since 1996, with inflation eating away at its purchasing power.

This funding formula disparity will only get worse as fuel economy improves and no change is made to fuel taxes. In fact, the Highway Trust Fund, which sends money to states for road maintenance, is on the verge of insolvency by the end of next year unless the current funding formula is changed.

The study’s author promotes a charge on highway vehicle miles traveled as a potential solution. This charge would vary based on how much the vehicle weighs to account for the damage it does to the road. As the study notes, this highway formula “gets closer to capturing the externalities and approximating the road maintenance cost of each vehicle.”

In other words, toll roads.

The highway funding situation in Missouri will need to be addressed soon. Travel on Missouri’s interstates has increased 17 percent since 2008, and travel on other Missouri freeways and expressways has increased 20 percent since 2010 (the most recent year for which data for the latter category is available). Conversely, since 2008, the Missouri Department of Transportation’s (MoDOT) overall revenue has decreased by 15 percent, with state fuel tax revenue—the largest state-contributed source of funding—falling 0.5 percent.

Making MoDOT do more with less led to an average of $745 million in unfunded road and bridge priorities between 2014 and 2018. And some of the most traveled roads in Missouri—Interstates 44, 55, and 70—will need to be reconstructed soon.

With these pressing problems, shouldn’t Missouri lawmakers heed the advice of the Tax Foundation report and consider tolling?

The post New Research Highlights Need to Modernize Transportation Funding appeared first on Show-Me Institute.

Both chambers of Congress had previously proposed infrastructure bills with roughly $300 billion dedicated to highways and bridges. Despite funding mechanisms not being finalized, the president has expressed support for an infrastructure bill, indicating similar bills may come up again in the near future. On a smaller scale, the Missouri Department of Transportation (MoDOT) received $61.7 million from the CARES Act.

Considering that MoDOT is routinely short on funding for road and bridge maintenance, more money is welcome. However, it won’t solve the long-term problem.

MoDOT faces a $745 million shortfall annually in “high-priority unfunded [road and bridge] transportation needs,” and roads and bridges are vital to Missouri’s economic and physical security.

Overreliance on federal money helped create MoDOT’s budget shortfall. Large federal stimulus packages are infrequent. The last stimulus money from the 2009 stimulus package came and went in a mere two years.

Depending on once-a-decade disaster dollars to adequately fund road and bridge maintenance is a poor strategy.

While additional infrastructure money will likely help, Missouri can help itself more by funding transportation through a self-sustaining method. Show-Me Institute analysts have long advocated for the expansion of user fees—like gas taxes or tolling—as a way to fund road and bridge maintenance. By tying the costs of driving to the costs of upkeep, MoDOT would have a more consistent revenue stream to perform necessary duties, as well as ensuring enough state funds are raised to receive matching federal funds.

Missouri can make itself less dependent on federal funds and provide MoDOT the funds it needs to keep our roads and bridges properly maintained. Potential federal infrastructure spending should not distract us from this goal.  

The post Federal Money for Roads and Bridges Won’t Fix Missouri’s Real Problem appeared first on Show-Me Institute.