Transit Action Network (TAN)

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

That Penny Sales Tax — Here’s What We Are Telling the Legislature

Posted by Transit Action Network on February 3, 2014

MOstateflagLast year the Missouri General Assembly considered a referendum (SJR 16) that would ask Missouri voters to approve a ten-year “temporary” one-cent sales tax for the purpose of increasing funding of our transportation systems.

The measure was filibustered and failed in the final days of the session.

It was anticipated that an initiative petition would be circulated early this year, but the Post-Dispatch reports that those plans have been suspended pending another try in the General Assembly.

Representative Dave Hinson has filed HJR 68

http://www.house.mo.gov/billsummary.aspx?bill=HJR68&year=2014&code=R

and Senator Mike Kehoe has filed SJR 48.

http://www.senate.mo.gov/14info/BTS_Web/Bill.aspx?SessionType=R&BillID=28965054

The two bills are virtually identical to those considered last session.

The House Transportation Committee will hold a hearing on HJR 68 on Tuesday, February 4, at Noon in the Capitol Building.  The Senate Appropriations Committee will hold a hearing on SJR 48 that same day at 8:30 am.

We are submitting written testimony to the committees. We encourage others to consider submitting testimony as well.

Following is our statement regarding these bills:

To: Senators Kehoe and Schaefer and members of the Senate Appropriations Committee

Representatives Hinson and Schatz, and members of the House Transportation Committee

From: Transit Action Network (an association of individuals and organizations who work to expand and improve public transit in the Kansas City region)

Subject: SJR 48 and HJR 68 – Testimony for Information Purposes

Please consider this testimony regarding SJR 48 and HJR 68.  We neither support nor oppose the resolution as introduced, but want to offer our perspective.

[1] – Taking Care of the System.  We acknowledge the need for additional funding for MoDOT to keep the existing system of roads and bridges in a state of good repair.  Director Dave Nichols cites a need for $485 million per year to do that, and says he expects to have only $325 million per year beginning in 2017.  We support closing that $160 million gap.

[2] – Need for Transit.  Missouri needs to provide significant additional funding for rural and urban public transit.  We are at or near the bottom among states with significant urban populations in providing state support for transit.  Moreover, if it makes sense for the state to provide farm-to-market roads, it also makes sense to provide “workforce-to-workplace” transit.

[3] – Changing Demographics and Preferences.  Our senior population is growing, along with an increasing inclination for young people to postpone or forego getting a driver’s license.  Nationally, driving peaked about 2006.  Thus, there is an increased need for public transit, and also for intercity passenger rail service such as that provided by our Missouri River Runner trains.

[4] – Concern About the Sales Tax – User Pays Principle.  We are aware of broad concern about using a sales tax to fund an expanded road and bridge program.  That would be a dramatic departure from the long-standing “user-pays” principle for roads and bridges, using the motor fuels tax, vehicle registration fees, and the sales tax on motor vehicles.  To the extent possible, road and bridge costs should be borne by the users and passed through to ultimate consumers as part of the overall cost of goods and services.

[5] – Concern About the Sales Tax – Regressivity.  We are aware that the sales tax is among the most regressive taxes, with the burden falling disproportionately on low-income workers.  These are the very workers who are less likely to drive and more likely to rely on public transit.

[6] – Concern About the Sales Tax – Local Needs.  We are aware of many local needs for which public officials look to a local sales tax.  Thus, there’s reluctance on the part of local public officials to get behind a significant increase in the state sales tax.

[7] – National Discussion on Funding for Roads and Bridges.  There is broad recognition that there are structural problems with total reliance on the motor fuels tax (due in part to changes in energy sources for motor vehicles), and that a shift toward a broader array of user fees makes sense.  We suggest that this might not be the time for Missouri to shift to the sales tax for roads and bridges while other revenue sources are under consideration.  We also suggest that ten years might be too long to commit to a sales tax while other user-based revenue sources are still being considered.

[8] – Here’s What We Think Might Have Greater Appeal.  We believe the following might have greater appeal to voters, as well as to local elected officials:

a – A smaller and shorter-term transportation funding program.

b – An increase in a combination of existing user fees to fund needed improvements to the existing road and bridge system

c – A small increase in the sales tax — as little as two-tenths of one cent — to fund improved and expanded rural and urban public transit, and to stabilize funding for the state-sponsored Missouri River Runner trains operated by Amtrak.

Thank you for considering our testimony.

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