Commentary: One-Cent Sales Tax For Transportation May Not Help Cities
The Missouri Legislature is considering asking voters to raise the sales tax by 1 percent (SJR 48) to fund transportation projects. For the first time, transit, bike, pedestrian and passenger rail projects would be eligible to compete for funding.
But this proposition is risky for non-highway modes of transportation. Why? That is the same funding source cities, transit agencies, bike and pedestrian interests, transportation development districts and community improvement districts are using to make local improvements in the absence of state funding.
The last time Missouri raised taxes for transportation was 1992, and I was executive director of Citizens for Modern Transit. A 6-cent-a-gallon gas tax was proposed to fund only highway projects. I asked legislators then to consider a 1-cent-a-gallon tax for public transit. That would have meant about $30 million a year for public transit statewide – or $15 million or so for Metro. MetroLink was 18 months from opening, but people were already thinking about expansion.
Using gas tax money for public transit would have required a vote of the people since Missouri’s constitution limits gas tax funds to roads and bridges. No public vote would be needed for a roads-only increase as the hike fit under Hancock Amendment restrictions. Road interests were furious with transit advocates. “The gas tax is our money,” they said.
At that time, Citizens for Modern Transit received about 75 percent of its funding from Civic Progress. (It has none from Civic Progress today, and the organization has not taken a position on the current matter.) Al Kerth, an executive with Fleishman Hillard and executive director of Civic Progress, encouraged my quest to have transit funding in any state transportation package.
To promote our cause, transit interests got a meeting with House Speaker Bob Griffin. We felt as though the speaker listened to our arguments sympathetically and saw the logic of addressing all the state’s transportation needs in one bill. But a few days later, the speaker told us he would be supporting the 6 cents for highways and bridges only. Public transit would be taken care of “next year.”
Meanwhile, Al Kerth called with Gov. Ashcroft’s chief of staff on the line. The message was simple, CMT should back off its opposition to the gas tax increase for roads only. Civic Progress would not look kindly on CMT’s opposition. The governor, we were told, would “take care of transit next year.”
Next year would never come.
To his credit, Gov. Mel Carnahan budgeted a few million for public transit in the mid 1990s. But the legislature has cut that meager funding to the point that today Metro receives only a few hundred thousand dollars from the state.
Local sales taxes
In 1994 the legislature gave local communities the ability to raise local sales taxes for public transit and later for trails. St. Louis (1994 and ‘97), St. Louis County (1994 and 2010), Kansas City and St. Joseph have passed successful local public transit and hiking and biking programs. In 2004, voters in St. Louis and St. Louis and St. Charles counties approved funding for Great Rivers Greenway bike and pedestrian projects. In addition in 2008, voters approved a sales tax increase for the Loop Trolley project in a transportation development district.
Likewise, Kansas City voters passed sales taxes to fund its bus system and a downtown streetcar project. Votes to expand that are set for later this year. And Kansas City is expanding its trail system. St. Joseph also has passed a tax for its bus system.
Since 1992, this area (including Illinois) has built 44 miles of MetroLink. Great Rivers Greenway has built hundreds of miles of biking and walking trails. Statewide, transit ridership is trending up, more people are biking and walking while vehicle miles travelled is heading down. Given that and more fuel-efficient cars, gas tax revenue for roads is also trending down.
The last time Missouri voters approved a gas tax for roads was 1987 – a 4-cent-a-gallon gas tax increase. Now road interests are eying the sales tax. Talk of the proceeds going for other transportation modes is not a guarantee.
This proposal is not in the best interests of cities, transit, bikers, pedestrians or low- and middle-income people. But get this, it would be great for truckers who cause tons of highway wear and tear.
As they drive through the state, they would not have to pay anything more. And the tax base of most rural areas is insufficient for their sales tax contributions to pay for the highways that pass through their counties and often amount to local roads.
Don’t get me wrong. Our highways need maintenance. But legislators should be looking at a variety of measures for additional funding other than the sales tax.
What to consider? Perhaps a combination of such measures as
- Tolls on the interstates. Electronic toll collection makes the drive seamless and would make trucks pay.
- Rental income. If I-70 were rebuilt, MoDOT should retain ownership of land adjacent to interchanges and reap income from long-term leases to businesses that service highway users.
- An indexed gas tax.
- A sales tax on motor fuels.
- An increase in vehicle registration fees.
Those supporting the sales tax will say these ideas don’t poll well. But what has been done to educate voters?
MetroLink needs expansion and the central corridor streetcar project in St. Louis could be a major plus for developments. Supplemental state funding for this and Kansas City’s plans would be great.
But what are the limits of the sales tax? The rate in the city of St. Louis is now 8.679 percent – higher in special taxing districts. If the state adds another penny, what does that mean for local attempts for fund local projects? And would the urban areas get anything close to a proportional return on the money they put into the state highway system?
A 1-cent sales tax for transportation is not a good idea.
Tom Shrout retired in 2010 after serving as executive director of Citizens for Modern Transit for 22 years. The opinions expressed are his and not necessarily those of CMT.