On the trail: Kehoe makes pitch for sales tax increase to bolster transportation needs
If there were a club for people who disliked taxes, state Sen. Mike Kehoe by his own volition would likely be a member.
But in sponsoring a 1-cent sales tax increase aimed at bolstering the state’s transportation infrastructure, the chairman of the Senate Transportation Committee is banking on the idea that voters will chip in more if the end result is safer and more convenient roads.
“Nobody likes taxes, including me,” said Kehoe, R-Jefferson City, in a telephone interview. “And even though there’s a disdain for taxes in our state and nation right now, folks will say ‘I hate it – but I know this bridge is crumbling. And I don’t want my kids’ school bus to go over that anymore.’ Or ‘I hate it, but this two-lane road through rural Missouri has no shoulder. We’ve had fatalities on that. And we need to get it fixed.’”
Safety – and the residual economic development that comes with construction – are key arguments behind the multi-faceted measure that Kehoe and Sen. Ryan McKenna, D-Crystal City, filed last week.
The proposal – which would expire after 10 years – would primarily go toward a fund paying for state transportation projects. About 10 percent would be provided to counties and cities for local transportation efforts. The tax would not be collected on medicine, groceries or gasoline. And the proposal would bar toll roads on existing highways while the tax is in effect.
Voters would have to approve the proposal, which could raise roughly $7.9 billion over the 10 years.
Both Kehoe and McKenna have unique backgrounds well situated to transportation issues. McKenna’s father – former Senate President Pro Tem Bill McKenna – served on the Missouri Highways and Transportation Commission, which oversees the Missouri Department of Transportation. Kehoe – who gained immense name recognition in Mid-Missouri as a car dealer – was a member of that board from 2005-09.
And for Kehoe, being on that commission gave him a close look at the challenges facing transportation funding.
Missourians in 2004 approved Amendment 3 that, among other things, steered revenues from vehicle sales taxes and some gas taxes to improving roads and bridges. That move, Kehoe said, allowed MoDOT to repair the state’s bridges and work on projects in St. Louis, Kansas City and Springfield.
But for years, transportation officials were warning policymakers that funding for road construction would sharply decrease around 2010. While federal stimulus dollars delayed that prospect temporarily, Kehoe said money isn’t available anymore for substantial transportation projects.
“Really since 2011, MoDOT has been more in the maintenance mode where they have enough money to maintain all of those systems I just described,” said Kehoe, referring to projects made possible through Amendment 3. “But as far as corridor expansion or replacing another 800 to 1,000 bridges and some the safety-related items – shoulders on roads that are heavily traveled on our rural routes – there hasn’t been money to do those projects.”
Beyond bolstering safety, Kehoe predicts that a potential boom in construction will produce thousands of jobs – which in turn will provide ancillary benefits to the state’s economy.
“What’s happened unfortunately with the slowdown in the construction industry is that many businesses that didn’t know they would feel the ripple effect have felt that ripple effect,” Kehoe said. “I don’t care if it’s the corner gas station, the seed store, the guy who sells parts for the tractor or blades for the bulldozer. Those people who really didn’t feel the economy slowdown in previous downturns are really feeling it.”
“Those same stakeholders are now saying ‘hey – this is something that’s affected my business and nobody thought it would. And we need to see if we can get it ignited and going again,’” he added.
It should be noted that Kehoe and McKenna’s resolution is still very early in the legislative process. And similar legislative proposals haven't panned out in the past.
But more than anything, Kehoe says he’s “excited that the conversation’s gotten started” over transportation funding.
“There are several proposals going through the legislature that could do with infrastructure funding,” Kehoe said. “Obviously more than likely, only one of them will make it out. I hope it’s this one. But the good news is lots of people are talking about it. Lots of people understand the importance of infrastructure. And at the end of the day, that’s a win for the state.”
Show Me a gas tax increase?
At least one person would like to see a different funding mechanism if the state embarks on a transportation construction spree.
“I like as much as possible – and I think this is a general statement about good tax policy – to connect the tax to the service being provided,” Stokes said. “You can’t always do that. You can’t pay for a police department by charging a fee anytime somebody calls 911. It’s not possible. It’s not doable. But you can do it with roads. We pay for the bulk of our roads through a gas tax.”
In addition to contending that a gas tax increase may not be as costly as some people think, Stokes said his preference is also a matter of fairness.
“You’re going to ask people that don’t drive very often to pay the same amount as people who drive all the time for the project,” said Stokes, referring to the sales tax increase proposal. “Where it gets silly is that walkers and bikers and people who have short commutes on local roads paid for by property taxes are going to be basically paying the same amount for this project as people with long commutes on the interstate and truckers and traveling businesspeople who ride the roads all the time. And that’s not right.”
Asked why he decided to pursue a sales tax increase instead of a gas tax hike, Kehoe noted that increased fuel efficiency standards and high gas prices make that revenue stream unreliable.
He also said a commission examining transportation funding found that raising gas taxes is exceptionally unpopular with voters.
“The funding stream has gone down and it will probably continue to go down,” Kehoe said. “It’ll never disappear, but it’s not reliable. And it’s the least favorite option when you talk to people. The Blue Ribbon Panel found that out when they were talking with folks all over the state. I found that out when talking to people.”
Although Stokes said that many question whether a gas tax hike can pass, he added “from a policy perspective, it would be better to do this primarily through gas taxes and vehicle registration fees as opposed to a general sales tax.”
On the Trail, a weekly column, weaves together some of the intriguing threads from the world of Missouri politics.