Transportation, fuel tax politically charged

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Transportation, fuel tax politically charged|ret||ret||tab|

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It is beyond dispute that Missouri's roads are in bad shape and getting worse every year. No single issue is more important to Missouri's future, or will consume more time during the 2002 Missouri Legislative Session, than the politically charged issue of transportation funding. |ret||ret||tab|

Therefore, I felt it was important to ed-ucate the voters who will ultimately de-cide this critical issue at the polls.|ret||ret||tab|

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Background |ret||ret||tab|

In order to see clearly where you are going, it's important to understand where you have been. Since the early 1940s, Missouri's gasoline and diesel fuel tax rates have steadily increased as follows: 1943 to 1962 3 cents per gallon; 1962 to 1972 5 cents per gallon; 1972 to 1987 7 cents per gallon; 1987 to 1992 11 cents per gallon; 1992 to 1994 13 cents per gallon; 1994 to 1996 15 cents per gallon; and 1996 to the present 17 cents per gallon.|ret||ret||tab|

The last fuel tax increase was passed in 1992 and was the funding mechanism for the horribly flawed 15-Year-Plan which, you will recall, failed to take into ac-count such simple but critical factors as inflation when calculating future financial revenues and expenses. |ret||ret||tab|

This 6-cent fuel tax increase, which was phased in at 2-cent increments in 1992, 1994 and 1996, is scheduled to sunset, or be automatically repealed, Ap-ril 1, 2008. Thereafter, the fuel tax rate would revert to the 11 cents per gallon tax rate in effect prior to the 1992 6-cent increase. |ret||ret||tab|

In addition to Missouri's fuel tax rate of 17 cents per gallon, Uncle Sam adds 18.4 cents tax per gallon of gasoline and 24.4 cents tax per gallon of diesel. |ret||ret||tab|

As a result, Missouri consumers currently pay 35.4 cents tax on each gallon of gasoline (18.4 cents federal, and 17 cents Missouri), and 41.4 cents tax on each gallon of diesel (24.4 cents federal, and 17 cents Missouri). When fuel is in the $1 per gallon price range, the combination of current Missouri and federal fuel taxes result in a tax burden of 35.4 percent on gasoline and 41.4 percent on diesel. |ret||ret||tab|

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Surrounding states |ret||ret||tab|

The Midwest has some of the highest and lowest fuel tax rates in the nation. For comparison purposes, Missouri's eight surrounding states have the following per gallon state fuel tax rates: |ret||ret||tab|

Arkansas: 21.7 cents on gasoline, 22.7 cents on diesel; Illinois: 20.1 cents on gasoline, 22.6 cents on diesel plus applicable sales tax; Iowa: 20 cents on gasoline, 22.5 cents on diesel; Kansas: 21 cents on gasoline, 23 cents on diesel (both gasoline and diesel tax rates will increase by 1 cent July 1, 2003); Kentucky: 16.4 cents on gasoline, and 13.4 cents on diesel; Nebraska: 24.5 cents on gasoline and diesel; Oklahoma: 17 cents on gasoline, 14 cents on diesel; and Tennessee: 21.4 cents on gasoline, 18.4 cents on diesel. |ret||ret||tab|

The consumers in these eight border states also pay the applicable federal fuel tax rate of 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel. |ret||ret||tab|

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Funding proposals |ret||ret||tab|

The Missouri Legislature is currently considering numerous proposals to fund transportation, most of which include some combination of the following tax increases: |ret||ret||tab|

1) a 3-cent to 6-cent increase in the Missouri fuel tax rate which is currently set at 17 cents per gallon; 2) the elimination of the April 1, 2008 sunset on the 6-cent fuel tax increase passed in 1992; and 3) a substantial increase in the Missouri state sales tax rate which is currently set at 4.225 percent. These various tax increase proposals purport to generate anywhere from $300 million to $650 million per year in additional transportation revenue. |ret||ret||tab|

In addition, I have recently been in-formed that there is a movement bank-rolled by various interested parties (contractor groups, etc.) to bypass the Mis-souri Legislature and submit an initiative petition directly to a vote of the people. This initiative petition, designed to generate approximately $600 million per year in additional transportation revenue, contains a substantial increase in the Missouri state sales tax rate as well as a 5-cent per gallon fuel tax increase.|ret||ret||tab|

It is important to note that this initiative petition and the proposals before the Missouri Legislature do not generate enough additional transportation tax revenue to address the many problems associated with Missouri's deteriorating Interstate System, including I-70, I-44, and I-55. Therefore, expanding or re-placing Missouri's interstates will have to be put on hold until additional revenue sources can be found. |ret||ret||tab|

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Conclusion |ret||ret||tab|

Regardless of whether a tax increase to fund transportation is passed by the Missouri Legislature or by initiative petition, the voters who have to pay the tab will, thankfully, have the final say at the polls. Passage or defeat of the tax increase may very well hinge upon the condition of the economy on election day. |ret||ret||tab|

Again, no one disputes that Missouri's roads are in bad shape. However, after considering all of the facts surrounding this very important issue, voters need to answer two simple question before they head to the polls. |ret||ret||tab|

First, is the Missouri Department of Transportation spending existing transportation revenues of approximately $2.2 billion per year in a responsible and prudent manner? |ret||ret||tab|

Second, should the tax burden on Missourians be increased whether it's an increase in the Missouri state sales tax rate, the Missouri fuel tax rate, or some other tax increase to provide the De-partment of Transportation with additional transportation revenues? |ret||ret||tab|

Ronald J. Leone |ret||ret||tab|

Attorney and executive|ret||ret||tab|

vice president |ret||ret||tab|

Missouri Petroleum Marketers and Convenience Store Association[[In-content Ad]]