On the trail Transportation tax bands together unique allies - and unlikely opponents
This article first appeared in the St. Louis Beacon, July 22, 2013: During any given session of the Missouri General Assembly, hundreds of proposals fall by the wayside. But state Sen. Joe Keaveny was especially dismayed by the demise of a one-cent sales tax increase for transportation.
The St. Louis Democrat even went so far to call the defeat of state Sen. Mike Kehoe’s constitutional amendment “tragic.”
“I thought it was disappointing that the Republican supermajority wouldn’t even let the voters decide whether they want to increase the tax to fund their roads," Keaveny said. "I don’t understand the rationale.”
Keaveny wasn’t the only one dismayed at the failure of the proposal, which perished in a last-week-of-session filibuster led by three Republican state senators. But several months after the measure's demise, many see the tax plan coming back next year either through an initiative petition or another legislative push.
One reason: The proposal possesses powerful allies, including the Missouri Chamber of Commerce, the Missouri Farm Bureau and organized labor. It also has boosters on both side of the aisle, including Kehoe, its sponsor.
“The problem that we have with infrastructure funding and the number of bridges and miles of road we have in the state of Missouri still is the same, no matter if somebody filibusters an idea or not,” Kehoe, R-Jefferson City, said. “All those issues still exist.”
But while the proposal possesses a unique coalition arguing for its passage, its opposition consists of equally unusual allies: conservatives who detest tax increases and progressives fearful of a sales tax hike's impact on the poor and elderly.
And without changes, this unlikely opposition could be speaking out if the issue comes up for a vote next year.
“I don’t mind having my law office pay a little bit more in taxes for better roads in Missouri,” said state Rep. Rory Ellinger, D-University City. “But I don’t think it should be dug out of the pocketbooks of the Social Security retirees.”
Death by Senate
Kehoe's proposal, co-sponsored by state Sen. Ryan McKenna, D-Jefferson County, would have gone primarily toward a fund for state transportation projects. About 10 percent would have been provided to counties and cities for local transportation efforts. The tax – which would expire after 10 years – would not be collected on medicine, groceries or gasoline. And the proposal would bar toll roads on existing highways or an increase to the state's gas tax while the one-cent sales tax is in effect.
Kehoe has argued for months that the proposal would go a long way toward fixing and repairing the state’s transportation infrastructure. Keaveny said he’s seen such a need simply by driving up and down Interstate 70 twice a week for his legislative duties.
Supporters also emphasize the economic impact of the proposal, including helping contractors who have been hit hard by the economic downturn.
“I believe that Missourians understand the importance of transportation,” Kehoe said. “They understand the safety benefits, the economic benefits that we have by maintaining a system. They also understand that MoDOT is not one of these government animals that just want to eat more. Their budget has gone down.”
In some ways, the fact that Kehoe's proposal got traction -- let along vigorous discussion -- is surprising. Previous efforts to raise taxes or use tolls for transportation projects have struggled. But Kehoe's measure passed the Senate in the spring with Republican and Democratic votes.
After several weeks, the House made relatively minor changes near the end of session – which sent the proposal back to the Senate. That’s where it faced a filibuster from state Sens. John Lamping, R-Ladue, Ed Emery, R-Lamar, and Rob Schaaf, R-St. Joseph.
During a recent Politically Speaking podcast, Lamping said, "I thought we would never see it again."
"I’ve been there three years; I’ve never seen a bill where 10 Republicans vote no on what ultimately goes on and passes," said Lamping, who said that the proposal was too large. "And each of those 10 Republicans knows they can vote no and tell everybody I’m against it – I voted no. But they also know that they can stop the bill, too."
The three senators succeeded in blocking a vote on the measure, which brought a wave of scorn. Lamping said he was getting hostile robocalls and phone calls from groups that supported the proposal in the final hours of session. Kehoe called the entire experience “frustrating.” And McKenna said on the Senate floor on May 17 "what I'm sad about is the folks that have tried to kill this haven't been forthright with us."
Even U.S. Sen. Claire McCaskill, a Democrat, took notice of the plan's demise. At a press conference earlier this month in Springfield, she sarcastically quipped that Republicans “got Sharia Law and Agenda 21 and nullification of federal laws that they can deal with, but not adequately funding education or transportation in this state.”
"So if it goes on the ballot, hopefully we can all work to get it on the ballot, and let the voters decide," said McCaskill, according to KSMU.
Opposition from the left
But while Lamping, Schaaf and Emery received the lion’s share of the credit -- or blame – for the tax's demise, they weren’t the only lawmakers who spoke out against the proposal.
During the May 14 filibuster, state Sen. Paul LeVota said he no longer supported it. While LeVota, D-Independence, initially voted for the plan in March, he questioned the idea of increasing sales taxes while simultaneously pursuing tax cuts. He also said on the floor that a sales tax increase was “a regressive tax.”
“When it first came to the Senate, I voted for it. There’s no denying that we need money for transportation,” said LeVota. “My [conflicted feelings] about it is the need is really there and a temporary one-cent tax wouldn’t be terrible. But if we’re cutting someplace else recklessly and then throwing the only burden onto the poor, it just didn’t make sense to me.”
LeVota was part of bloc of Democratic lawmakers and progressive-leaning interest groups with major qualms about using a sales tax increase for transportation projects. Besides Ellinger, 16 other Democratic representatives voted against Kehoe's proposal in the House.
Earlier this year, Missouri Association for Social Welfare executive director Jeanette Mott Oxford urged a "no" vote on Kehoe’s bill. While she said in an e-mail that Missouri needs “to maintain and improve its roads, ports and bridges, and we also need the jobs created by these projects, the payment method for these projects should create a more modern, fair and adequate tax system rather than make our already bad system worse.”
And Missouri Budget Project director Amy Blouin told the Beacon that “we absolutely have concerns” about the impact of the one-cent sales tax increase “on Missouri families – particularly lower-income families who will face a regressive burden.” Blouin’s group was fiercely critical of legislation that advanced earlier this year containing a permanent sales tax increase aimed at offsetting a income tax decrease.
“I think it’ll face significant opposition from both sides of the aisle,” Blouin said. “The very conservative and very progressive side on tax policy will have problems with it. If they’d be able to adjust it, they’d be really able to broaden the support.”
LeVota also questioned whether increasing the state's sales tax would place Jackson County at a disadvantage with Johnson County, Kansas. And he also wondered whether a steep sales tax hike would make it more difficult for school districts to pass ballot initiatives to secure more funding.
Kehoe, though, contended that the transportation projects would have a “ripple effect” that could improve the lives of low-income people.
“It is an economic engine that will provide some of those people who need to get to jobs a way to get to jobs,” said Kehoe, who estimated that the tax would create thousands of jobs over 10 years. “Maybe they’re a crane operator that’s now working at a convenience store. Now they get to go back to being a crane operator. So the convenience store job is open and somebody else gets a job.”
“The ripple effect is incredible on the economy,” he added. “And I think it affects all socio-economic levels.”
While Keaveny supported Kehoe's proposal, he said he had some misgivings.
"It is a concern – especially in the city of St. Louis," said Keaveny, referring to raising the sales tax. "Between the state’s sales tax and the local sales tax, we’re probably up over 11 percent. So yeah, how high is too high? I don’t know the answer. But the project needs to be done. We’re going to raise the revenue somehow to do it, right?"
Blessing in disguise?
Despite its legislative death, it’s widely expected that the transportation tax will come back next year. When he spoke to the St. Louis Regional Chamber last week, Gov. Jay Nixon endorsed some sort of transportation funding.
Nixon though wasn't specific about what type of funding mechanism he supported.
“Maybe this is a blessing in disguise to take a step back, figuring out the right solution and then going forward with that," LeVota said.
Lamping suggested raising the sales tax by a smaller amount and lowering personal income tax rate. That, he said, would be "Hancock neutral" and wouldn't require a public vote.
Blouin suggested removing a sales tax exemption for trucks, which she noted cause wear and tear on the state’s roads. She also said it might be wise to add in an Earned Income Tax Credit into the proposal to offset the tax's impact on the poor.
“It’s administratively simple,” Blouin said. “Individuals that are eligible for the federal credit are eligible for the state credits in the states that have those. And they could simply file for a refund when they’re filing.”
(Oxford said in her e-mail that the state hasn't "adjusted our fuel tax for the past 17 years, but the cost of projects has risen with inflation." She said her group wouldn't support raising the gas tax without the adoption of an earned income tax credit.)
Asked about an earned income tax credit, Kehoe said this month that “the coalition that we have in support of what you saw move forward – and I said this a million times – is fragile.”
Kehoe said, “The bill the way it was fine-tuned is the best we can get and still keep as many people on board as possible.”
While Kehoe said it's likely groups will be looking to get the issue before voters through an initiative petition, but he would have preferred to move it forward through the legislature. And like Keaveny, he said the plan's demise was a missed opportunity.
"It’s not frustrating because I want to impose a tax on people," Kehoe said. "It’s frustrating because I believe elected officials should allow their constituents on this big of an issue to vote. Let them vote on it. That’s all I want people to be able to do."
On the Trail, a weekly column, weaves together some of the intriguing threads from the world of Missouri politics.