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TAX TALK: State Transportation Director Patrick McKenna fields a question at a chamber event in support of Proposition D. Panel participants were Matt Morrow, Dan Kleinsorge, Mary Beth Hartman and Kevin Corlew.
SBJ photo by Mike Cullinan
TAX TALK: State Transportation Director Patrick McKenna fields a question at a chamber event in support of Proposition D. Panel participants were Matt Morrow, Dan Kleinsorge, Mary Beth Hartman and Kevin Corlew.

Chamber urges support for fuel tax increase

Ballot issue aims to boost fuel tax for first time since 1996

Posted online

The Springfield Area Chamber of Commerce is among supporters of Proposition D, a proposed gas tax increase that goes before Missouri voters Nov. 6.

Chamber President Matt Morrow said during a Sept. 27 chamber-hosted Prop D informational session the organization’s board of directors has endorsed the 10-cent gas hike, and they’re now encouraging its members to support the measure in November.

If approved, the tax is expected to generate $288 million annually to the state road fund for Missouri law enforcement and $123 million annually to local governments for road construction and maintenance upon full implementation.

More than 50 businesspeople attended the Springfield event, in which the chamber brought out Missouri Department of Transportation Director Patrick McKenna.

In his presentation, McKenna identified MoDOT as the seventh largest transportation system in the nation, but that it ranked 46th nationally in revenue per mile. “You compare that to other states surrounding us – Iowa, as an example, has three times the revenue per mile under their management than we do here in Missouri,” he said.

The last year the state’s gas tax increased was in 1996. That was the end of a 6-cent incremental hike approved by the state legislature in 1992.

McKenna said the cost of transportation-related expenses – concrete, asphalt, steel and labor – has risen while revenue generators, such as the gas tax, haven’t kept pace with inflation. The current gas tax of 17 cents per gallon is worth a purchasing power of 7 cents, he said, compared to ’96.

“That’s really the primary culprit that we’re dealing with,” he said. “On a given year, we lose ground on purchasing power between $50 million to $60 million.”

Prop D recommends increasing the motor fuel tax to 27 cents per gallon, phased in at 2.5-cent increments over four years, beginning July 1, 2019.

The upcoming ballot measure isn’t the first time MoDOT has sought to resolve the funding issue.

MoDOT most recently sought a three-quarter-cent transportation sales tax in 2014, designed to generate $480 million annually for the state’s Transportation Safety and Job Creation Fund and $54 million for local governments. Voters defeated the issue with nearly 59 percent opposed to the tax.

Panel perspective
Morrow moderated a panel discussion with state Rep. Kevin Corlew, R-Kansas City; Mary Beth Hartman, owner and president of Hunter Chase & Associates Inc.; and Dan Kleinsorge, campaign manager of SaferMo.com, a coalition advocating for passage of Prop D.

Corlew said the fuel tax hike is a constituent-driven issue for him. He said he frequently hears from those in the Kansas City area with concerns over roads and bridges.

“We believe that Missourians will accept more of an incremental increase,” he said.

With management roles in two companies in the highway construction industry, Hunter Chase & Associates Inc., and Hartman & Co. Inc., Hartman acknowledged her support is tied to jobs.

“As a small-business owner, it’s about the people that work for our company. It’s important that we give some security to our infrastructure workers,” she said, noting heavy highway contractors are concerned about losing talent to engineering and design fields.

Morrow noted Hartman isn’t always supportive of tax issues. “There are taxes that are specific and important,” Hartman said, adding she also was an advocate of the Ozarks Technical Community College tax issues approved by voters in April. “For that reason, I think this is a very good tax.”
 
Morrow said transportation funding has long been a top priority for the chamber, adding Gov. Mike Parson supports statewide infrastructure improvements. Parson was in Springfield on Aug. 1 for a State of the State address in which he also endorsed the gas tax hike.

“A fundamental building block for driving our economy is education and transportation,” Morrow said. “And if you have those things working for you, you can do a lot. Right now, the charge from our governor very much echoes that – transportation and infrastructure and workforce development – those are key elements.”

Aside from improving infrastructure, Kleinsorge with SaferMo.org said the Missouri State Highway Patrol is a beneficiary of the road fund, and would be even more so with Prop D’s passage. The MSHP receives funding for administering and enforcing state motor vehicle laws and traffic violations. The Missouri General Assembly determines the amount available annually to the MSHP, with $241 million spent in fiscal 2017, according to MoDOT.

“We want to make it clear to voters that it is part of the road fund,” Kleinsorge said. “You are not just getting the highways and bridges. You’re also getting public safety on the highways.”

Ballot concerns
The path to Prop D getting on the Nov. 6 ballot wasn’t an entirely smooth process, as the measure was challenged this summer by state Rep. Mike Moon, R-Ash Grove, and Ron Calzone, director of Missouri First Inc., a think tank that promotes constitutional government.

After state lawmakers voted in May to place the issue on the November ballot, Moon and Calzone filed a lawsuit in Cole County Circuit Court. The pair argued Prop D violates Missouri’s constitutional requirement that bills contain a single subject in the ballot language. Originally the measure was introduced in the legislature to establish a state tax exemption for Olympic medalists, but was amended to include provisions for a public vote on the state gas tax and to create an emergency road fund.

The lawsuit was dismissed in Cole County in mid-August, a move supported by the Missouri Court of Appeals-Western District in Kansas City in early September. The appeals court ruled the provision of the state constitution requiring a single subject does not apply to referendum petitions placed on a ballot by lawmakers.

Neither Moon nor Calzone responded to Springfield Business Journal’s messages seeking comment on the lawsuit and their positions on Prop D.

As for the cost at the pump, McKenna estimated consumers would pay about $1.25 per month for every 2.5 cents the motor fuel tax increases. Once fully phased in after four years, the additional cost would be about $5 per month for the average driver.

“When you put it in context, some people think, ‘10 cents? My goodness, that’s a big increase.’ But $5 a month for improvements to safety on the roadways is pretty conservative and the right size for acting on them,” he said.

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