Show Me the Money: Missouri Considers Its Transportation Future

I spoke yesterday with the Vice Chair of the Missouri House Transportation Committee, Rep. Thomas Long (R), who called to fill me in on the state of transportation funding in the Show Me State. Missouri was one of the states that I included in my “13 States to Watch in 2012” at the beginning of the year based on a 2011 comment by a Missouri Department of Transportation (MoDOT) official that the department was “exploring the possibility of doubling the state gas tax over 10 years to help pay for the widening of I-70 between St. Louis and Kansas City.” In our conversation, Long made it clear that such a scenario was never in play in the Missouri legislature this session. Lawmakers did consider bills to have voter referenda on lowering the state gas tax while raising the diesel tax and adding a sales tax dedicated to road funding. A plan to toll I-70 was also considered.

Long himself was the sponsor of two transportation funding-related pieces of legislation:

  • House Bill 1874 would establish a 0.7 percent sales tax on gasoline and increase the current sales tax on other goods to 0.7 percent to be deposited into the State Highways and Transportation Department Fund to be appropriated solely for transportation purposes. It would also increase the excise tax on diesel fuel from 17 cents to 27 cents per gallon and eliminate the excise tax on all other motor fuel.
  • House Bill 1277 would allow the Missouri Highways and Transportation Commission within the Department of Transportation to enter into binding highway infrastructure improvement agreements with a county, political subdivision, or private entity for the construction or improvement of state highway infrastructure.

Long’s bills and others have been unable to gain much traction during the legislative session. But Long believes transportation funding will continue to be a “burning issue” in the state. House Speaker Steven Tilley (R) has formed a Blue Ribbon Citizens Committee (as other states have done) on Missouri’s transportation needs. The chairman of the state Senate Transportation Committee, Bill Stouffer (R), is also convening a joint House-Senate panel to look at transportation funding needs. Both committees will meet over the summer and come back with recommendations in time for the 2013 session. At that time, Long said, there will be a serious effort to agree on a funding mechanism that Missouri voters would be willing to accept. An amendment to the Missouri constitution requires that any tax increase that raises more than $90 million go before a vote of the people.

The challenge, according to Long, may be convincing Missourians that additional revenues for transportation are even needed. While Missouri voters consistently rank transportation improvement high among the issues the state needs to address, there is seldom any consensus on how to pay it.

“That’s when everything goes haywire,” Long said.

Moreover the state recently completed an eight to 10-year period during which they were able to take advantage of a triple A bond rating to sell bonds and fund transportation projects. So the roads that many Missourians see in 2012 look “pretty decent,” Long said, especially compared to other problems the state is facing.

“People are looking at mortgage foreclosures,” he noted. “We’ve got two very large school systems (St. Louis and Kansas City) that are unaccredited … That blacktop looks pretty good compared to some of these other issues we have. It’s kind of hard to get through the clutter.”

But state transportation planners are looking at things five to seven years out.

“We know that we’re in trouble,” Long said. “It gets hard to go to your citizenry and say ‘I know that things look (good) now, but you don’t understand that even though you don’t have a pothole in front of your house, we’re already in a crisis mode.”

The state’s construction and maintenance budget, which at one time stood at $1.2 billion, has been cut in half, Long said. It’s projected that within five to seven years, the state will not be able to meet their federal match and will begin to lose out on federal transportation dollars. Under the current scenario, assuming the 2013 legislature is able to agree on recommendations of the two funding committees and put a plan before the voters in November of next year, the state will lose another year-and-a-half to two years off that five-to-seven year window.

Long said many policymakers in the state believe “some type of sales tax component” will ultimately have to be part of the solution for Missouri.

One transportation revenue-generating idea that appears to have fallen completely out of favor: tolling I-70, one of the state's two major East-West routes.

“Can there be anything less alive than dead?” Long quipped.

Missouri is one of three states in recent years to receive special permission from the federal government to toll existing interstates. Some in the state question whether that authority has already run out Long said.

MoDOT presented a toll proposal to lawmakers to make improvements to the interstate that were estimated to cost anywhere from $1.4 billion to $4 billion. At the low end, the project would have involved repaving and shoring up the road. At the high end, the project would have also involved adding truck-only lanes and replacing interchanges. The plan was to structure it as a public-private partnership with a private consortium financing, rebuilding and operating the highway. But beyond that the plan was not well defined, Long said.

“No idea how much the toll was going to be, no idea how much reasonable profit was going to be for the private side of it, minimum 25-year lease, and that was about it,” he told me.

The reason lawmakers balked at the plan, Long said, can be traced to the way the state department of transportation is structured in Missouri. MoDOT is overseen not by the governor or legislature but by a separate commission. Long said if the legislature had given the agency the authority to go out and seek such a partnership, it would have been tantamount to handing them a blank check for $4 billion since MoDOT would not have had to come back to the legislature for approval of the final plan.

“It was very hard for us to say ‘okay, go ahead, even though there are all these details that we don’t know,' ” Long said. “(The plan) pretty much fell with a thud.”

Long said the hope now is that Missouri’s Congressional delegation can make the case that I-70 is a “particularly vital artery for the movement of goods and services” across the country and that it’s a project worthy of significant federal investment if the state can put up some of the money for it.

“Would the feds be willing to come in understanding how vital I-70 is to the country as a whole and help us out in bringing that construction forward?” Long asked. “Because we do not want to be reconstructing I-70 for 10, 12, 15 years. That would be a nightmare.”

There is more on the latest I-70 toll proposal setbacks in this article from the St. Louis Post-Dispatch.

As for other infrastructure financing mechanisms that could be in Missouri’s future, Long points to the possibility of a state infrastructure bank. He plans to study the issue in depth once the legislature wraps its session May 18th. More than 30 states and Puerto Rico have at least some experience using an infrastructure bank to finance projects (see my Capitol Research brief on the topic from last year). Long said he’ll look to states like Virginia, which last year revamped its existing bank.  

“I want to see if that’s a tool that we might be able to use also,” he said.

Long believes that kind of sharing between states may be vital to finding the necessary solutions to the nation’s transportation funding woes.

“I imagine that if one state could find something that seemed to work and break out, then maybe the other states could point to that and say that’s what we need to do,” he said. “The hard part is, the fact of the matter is: it costs money.”

While things might not have panned out for Missouri in 2012, it’s probably safe to put the Show Me State on your list of states to watch in 2013 on transportation funding. At least Long and other Missouri lawmakers hope that’s the case.