Transit Action Network (TAN)

Advocates for Improved and Expanded Transit in the Kansas City Region.

Proposed Missouri Sales Tax for Transportation Passes Senate

Posted by Transit Action Network on April 8, 2013

On March 14 the Missouri Senate passed SJR 16, a resolution that would ask Missouri voters to approve a one-cent sales tax for transportation for a period of ten years.  The vote was 24-10.  See “Current Bill Summary” on the Senate website for current status:MO_senate

http://www.senate.mo.gov/13info/BTS_Web/Bill.aspx?SessionType=R&BillID=17866209

The resolution is now in the House where a nearly identical resolution has been under consideration.  We have heard reports that this one-cent sales tax proposal might not get out of the House this year, but that it might instead serve as the basis for an initiative petition campaign financed largely by highway interests.  Thus, it’s important to continue to try to make this resolution as “transit-friendly” as possible.

The resolution is not entirely to the liking of Missouri transit and bike/ped interests since it doesn’t include a specific percentage of the new revenue for non-highway purposes such as local and rural public transit, Amtrak and other inter-city passenger transportation, and improved accommodations for pedestrians and cyclists.  However, it could turn out OK depending on what’s in MoDOT’s “list of projects” that will be prepared prior to the measure’s going on the ballot.  Our impression is that MoDOT has become a whole lot more friendly to non-highway modes of transportation and thus all is not lost.

Below is the “Current Bill Summary” from the Senate website, along with our annotations and comments [Italicized, in color and enclosed in brackets].

SJR 16 – Imposes a temporary one cent sales and use tax for transportation purposes

Current Bill Summary
SS#2/SCS/SJR 16 – This constitutional proposal, if approved by the Missouri voters, would raise the state sales and use tax by one percent for a period of ten years. The proceeds from the additional sales and use tax [estimated to be a total of approximately $7.92 billion over ten years] are to be used for transportation purposes. The temporary sales and use tax measure must be resubmitted to the voters every 10 years until such measure is defeated.

 [The matter of whether to use a general revenue source such as the sales tax to fund highways and other transportation purposes is an important tax policy question that we believe needs further debate.]

Five percent of the sales and use tax proceeds shall be deposited into the County Aid Transportation Fund, which is created in the state treasury by the resolution. Moneys in the newly created fund shall be distributed to the various Missouri counties in a manner similar to how motor fuel tax proceeds are distributed to counties. [A portion of existing state fuel taxes and other user fees is already distributed to counties.] The sales and use tax proceeds distributed to the counties may be used for local highways and bridges, state highway system purposes, or for county transportation system purposes (multimodal).

[“Multimodal” is an ambiguous term meaning any mode of transportation other than roads and bridges.] 

In a similar manner, five percent of the sales and use tax proceeds shall be deposited into the Municipal Aid Transportation Fund, which is created in the state treasury by the resolution. Moneys in the newly created fund shall be distributed to the various Missouri cities, towns and villages in a manner similar to how motor fuel tax proceeds are distributed to such political subdivisions. [A portion of existing state fuel taxes and other user fees is already distributed to cities and other local jurisdictions.]  The sales and use tax proceeds distributed to the cities, towns, and villages may be used for local roads and streets, state highway system purposes and uses, or for city transportation system purposes (multimodal).

 [For reference, our estimate of Kansas City, Missouri’s per capita share of the proposed sales tax is approximately $30.4 million over the ten years. 

$7.92b x .05 x (2010 population KCMO / Missouri: 460k / 5.989m = 0.0768) = $30.4m or about $3 million per year

 Our $3 million estimate uses a distribution method based on population. Actual distribution of new revenue to cities and counties would be according to a more complicated formula.

More than 25 percent of current highway user fees (fuel taxes, vehicle registration and driver license fees, and vehicle sales taxes) is passed through to cities and towns.  Ten percent of the new sales tax for counties and cities/towns/villages would thus represent a significantly lower share of the new revenue than they get at present: it would be an increase in revenue to such jurisdictions, but a lesser share of the state total.]

The remaining sales and use tax proceeds (90%) shall be deposited into a newly created trust fund known as the “Transportation Sales Tax Fund”. Moneys in the Transportation Sales Tax Fund may be expended by the commission for state highway system purposes or for state transportation system purposes and uses (multimodal).

 [Early press reports about SJR 16 have indicated there would be an off-the-top allocation of $1 billion or more for reconstruction of I-70 between Independence and Warrenton. Those accounts have incorrectly conflated the Resolution itself with a preliminary spending scenario that MoDOT has floated in a four-page color brochure. MoDOT has been using that scenario in discussing the update to its long-range transportation plan that is currently underway through “On the Move” listening sessions being held throughout the state. Based on our participation in those sessions, as well as accounts we have read, we believe it is reasonable to conclude that MoDOT’s initial scenario will not survive as prepared.]

The resolution requires the one percent sales and use tax to expire in 10 years unless the sales and use tax is renewed by the voters. If the decennial sales and use tax measure is ever disapproved by the Missouri voters, the sales and use tax will terminate at the end of the year following such election.

Unless approved by the voters, the General Assembly, counties, and municipalities are prohibited from increasing or decreasing the motor fuel tax from the rate of the tax authorized by law on January 1, 2013, while the sales and use tax is in effect

[On careful reading, this provision does not actually promise that the fuel tax would not be raised, only that it would not be raised without a vote of the people — which would be required in any case.  Given that Missouri ranks 45th in the amount of its motor fuels tax, such an increase still makes a lot of sense with or without the sales tax.]

Unless approved by the voters, the commission shall not own or operate a toll highway or toll bridge on a state highway or bridge that is in existence on the effective date of this resolution while the sales and use tax is in effect. A similar provision applies to counties and municipalities. Unless approved by the Missouri voters, counties and municipalities are prohibited from tolling existing highways or bridges under their jurisdiction during the duration of the sales and use tax.

[Again, the “unless approved by voters” clause doesn’t actually prevent Missouri from having one or more toll roads at some point during the ten years, if voter attitudes change.]

The act requires, prior to any election to which the sales and use tax proposal is submitted to the voters, the commission to approve a list of projects, programs, and facilities on the state highway system and state transportation system that will be funded from the additional sales and use tax proceeds.

[While “list of projects” might be interpreted by most people to mean highways or bridges, the inclusion of the word “programs” is encouraging.  Thus, the “list of projects” developed by MoDOT might well include such things as an annual allocation for OATS and other rural transit systems throughout the state related to the rapid growth in the senior population as “baby boomers” retire. Additional programs might include an annual allocation to urban transit systems for capital expenditures or operating assistance, an annual allocation to continue and increase the frequency of “Missouri River Runner” passenger trains operated by Amtrak, etc.]

Starting in the 1st fiscal year following voter approval of the resolution, the commission shall annually submit a report to the Governor, General Assembly and the Joint Committee on Transportation Oversight that shall include the status of the approved list of projects, programs and facilities on the state highway system and state transportation system.

In the annual report filed in the 6th fiscal year following voter approval of the resolution, if the Joint Committee on Transportation Oversight identifies and determines that any project, program or facility on the commission’s approved list has not yet been included in the commission’s statewide transportation improvement program, then the joint committee by two-thirds majority of its members, shall identify each specific project, program or facility that has not been included in the commission’s statewide transportation improvement program and shall within 30 legislative days recommend suspension of appropriations from the transportation sales tax fund in an amount that is equivalent to the amount of funds necessary for each specific project, program or facility that was not included.

 [Provisions in the above two paragraphs help to keep MoDOT “honest” with respect to the list of projects.]

Under the resolution, the General Assembly may approve the recommendation of the joint committee by enactment of a concurrent resolution. Such resolution may be introduced in either legislative chamber no later than 14 calendar days after receipt of the joint committee’s recommendation. The resolution shall not be subject to amendment by either chamber and may only be approved in its entirety. The presiding officer of each legislative chamber in which a concurrent resolution has been introduced, shall submit it to a vote of the membership not sooner than 7 calendar days nor later than 14 calendar days after introduction of the concurrent resolution. The presiding officer of the chamber passing a concurrent resolution shall immediately forward the resolution to the other chamber and the presiding officer of that chamber shall submit it to a vote of the membership not sooner than 7 calendar days or later than 14 calendar days of its receipt from the other legislative chamber.

Any suspension of the appropriations from the transportation sales tax fund shall be null and void when the highways and transportation commission amends its statewide transportation improvement program to include each project, program and facility identified in the joint committee’s recommendation.

 [End of Current Bill Summary]

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