Missouri Drivers Likely To See First Gas Tax Hike In Decades
The Missouri House gave final approval late Tuesday to raising the state’s gas tax by 12.5 cents over the next five years, a hard-fought victory for advocates of finding a dedicated funding source for transportation projects.
The Senate passed the bill earlier in the session. The increase now goes to Gov. Mike Parson, who is expected to sign it into law.
The bill passed 104-52 after close to four hours of sometimes intense debate. It was one of the rare times when House Democrats proved to be decisive, since the proposal sparked strong opposition from members of the Republican majority. The majority also had to fight off several amendments that would have required the bill to go back to the Senate.
The legislation, which was championed by Senate President Pro Tem Dave Schatz, R-Sullivan, is the first time Missouri has raised its 17-cents-per-gallon gas tax since 1996. It will hike the gas tax 2.5 cents per gallon every year for five years until it’s 29.5 cents per gallon. There are also provisions in the bill that would allow consumers to get a rebate of the increase if they turn in the proper paperwork to the state.
Schatz said the gas tax is expected to generate close to $500 million annually for the state’s roads and bridges. Missouri currently has one of the lowest gas taxes in the country.
“We have over $10 billion in projects that have been piling up over time because we haven’t addressed the gas tax,” Schatz said in an interview after the vote. “We’re $800 million short in funding our current needs right now.”
Since 2014, two efforts to raise either the sales or the gas tax to boost transportation spending have failed. The House handler of the current bill, Rep. Becky Ruth, R-Festus, said Missouri needs a consistent revenue stream to maintain its network of roads. She also said the fact that Missourians can ask for a rebate either through the mail or electronically makes it different from other proposals.
“So this satisfies both groups of people,” Ruth said. “Whether you are a person who wants to invest in our roads and bridges — or you decide, ‘You know, I’m not happy about this and I want my money back,’” Ruth said. “I don’t know of any of our taxes where you can get 100% of your money back.”
She said that the gas tax hike, when fully implemented, would cost a person who drives an average number of miles about $6 a month or $70 a year. Someone with a larger vehicle like a pickup truck would pay around $100 more a year.
“I believe that this is an investment in our roads and bridges,” Ruth said. “We are conservatives. We have a duty to make sure our roads and bridges are safe.”
But critics of Schatz’s legislation contended it was running roughshod over voters who shot down recent efforts to raise taxes for transportation projects. Rep. Jason Chipman, R-Crawford County, unsuccessfully sought to have the plan require voter approval. Ruth said that probably would have killed the bill, with a Senate filibuster blocking any changes.
Chipman said that Missourians likely wouldn’t take advantage of the rebate portion of the bill and added that raising taxes isn’t the right move at this time.
“I’m sure there were many people on the other side of the aisle who said, ‘Yeah, I ran on a platform of increasing taxes.’ I know I didn’t,” Chipman said. “You look up the Republican Party platform, it doesn’t say anything in there about raising our taxes.”
Chipman said that raising the gas tax is questionable because Missouri has an unprecedented amount of general revenue that can be spent for any purpose. Missouri is also slated to get close to $2.8 billion from the latest federal coronavirus relief plan — and perhaps even more money from an infrastructure bill that’s currently being debated in Congress.
“It’s a regressive tax as well,” Chipman said. “Who’s going to get hurt the most? Poor people. Poor people drive older cars. Older cars get worse gas mileage. They’re going to be buying more gas. And then the government is going to say, ‘Well you’ve got to do all these things if you want your rebate.’”
Because there was substantial opposition from House Republicans, Democrats proved critical in getting the bill over the finish line. Some agreed with Ruth that the state needed to make a greater investment in roads and bridges in order to boost economic growth and generate jobs.
“Some of these jobs are paying $70,000, $80,000 a year,” said Rep. Gretchen Bangert, D-Florissant. “And having safe overpasses, underpasses, entryways — we’re putting in roundabouts. There’s going to be lighting on these bridges. It’s going to make everything safer so there'll be fewer accidents.”
The legislation will now go to Parson, who has made finding more revenue for transportation projects a major priority of his administration. It was also a key objective for the Missouri Chamber of Commerce and organized labor groups.
Follow Jason on Twitter: @jrosenbaum