To me, the most galling proposal on the Aug. 5 ballot in Kansas City and across Missouri is the proposed 3/4-cent state-sales-tax increase for transportation.
Like a lot of tax-hike measures, it is tempting on the surface — $480 million annually for state transportation needs and $54 million a year for local road projects.
Projects to be financed — promised, anyway — include construction of a new Broadway Bridge in Kansas City and a third lane for I-70 between the outskirts of Kansas City and the outskirts of St. Louis.
The tax, if approved, would also direct about $14 million a year to the cost of expanded streetcar lines on Main, Independence Avenue and Linwood Boulevard and a MAX bus route on Prospect Avenue.
(If voters approve an expanded streetcar district Aug. 5, they would be asked later to approve a 1 percent sales-tax increase to finance the expansion. Because of the city’s agreement with the state, however, residents of the expanded streetcar district would pay only 1 percent more in sales taxes, instead of 1.75 percent more.)
But even with the “streetcar shuffle” this 3/4 cent sales-tax increase looks like a terrible deal for the average taxpayer.
Consider, first, that the main beneficiaries would be:
— The trucking industry, which is most responsible for tearing up the highways and roads
— The heavy construction industry, which excavates the dirt and rock, grades the land and builds the roads
— Engineering firms, which design and engineer the projects
— Material supply companies, like those that provide cement and asphalt
— The law firms that represent all the industries mentioned the above.
Under the name of a committee called Missourian for Safe Transportation and New Jobs, those special interests are going to pour several million dollars into their effort to pull the wool over the eyes of Missouri voters and convince them that a general sales tax is the best and only way to get better (and more) roads and bridges in Missouri.
It’s utter balderdash, I tell you.
A few points:
1) Implementing this tax increase requires amending the Missouri Constitution. Yes, amending the constitution! We would be voting to change the state constitution to allow the imposition — for the first time ever — of a general sales tax exclusively for transportation. I am no constitutional scholar, but amending the constitution to pave the way for a sales tax for better roads seems ridiculous. Four other proposed constitutional amendments are on the Aug. 5 ballot. They cover such areas as farming policies, gun rights and protecting electronic communications. It makes sense that they fall under the constitutional umbrella — but not a sales-tax increase for better roads.
2) The sales tax is the most regressive of all taxes. That is, it hits low-income people the hardest. Look at it this way: If a person with an annual income of $20,000 pays $1,000 in sales taxes in one year, the sales tax amounts to 5 percent of his or her income. But $1,000 in sales taxes on an income of $100,000 a year amounts to only 1 percent of income. Yes, people with higher incomes spend more than people in lower-income brackets, but in most cases the spending differential does not amount to a multiple of five times.
3) Missouri already has one of the highest sales tax rates in the country. The state currently charges a 4.225 percent statewide sales tax, while local governments add an average of 3.36 percent, according to the Tax Foundation, an independent tax-policy research organization based in Washington. The combined rate of 7.58 percent ranks Missouri 14th among all 50 states.
…The logical way to raise hundreds of millions of dollars a year to improve and add roads, highways and bridges is to raise the state gasoline tax.
The gas tax has stood at 17 cents a gallon (one of the lowest rates in the nation) since 1996.That’s almost 20 years! Raising it to 26 cents would generate an estimated $300 million more per year.
Hiking the gas tax is an entirely logical way to go because the more we use the highways and bridges, the more we should pay. And the more that Big Trucks tear up I-70, I-49 and our other interstates, roads and highways, the more they should pay.
But the trucking companies, the construction industry, the big engineering companies and the law firms that represent those industries want to stick this tax on all consumers, regardless of how much they use the roads.
Missouri Gov. Jay Nixon has come out strongly against this proposal, and so has the St. Louis Post-Dispatch.
To my astonishment, The Star this afternoon posted an editorial endorsing Amendment 7. Here’s the link.
The recommendations of Nixon and the Post-Dispatch are good, credible indicators, however, that Amendment 7 is a bad deal for Missouri taxpayers…On Aug. 5, let’s weigh in with a resounding “NO” vote on Constitutional Amendment No. 7.
JimmyCsays: At the juncture of journalism and daily life in KC 
I was already thinking this when I got down to the paragraph…
…The logical way to raise hundreds of millions of dollars a year to improve and add roads, highways and bridges is to raise the state gasoline tax.
Yes, exactly! Missouri has the fourth lowest gas tax in the union. And I would love to see that the fuel tax for the big trucks go up twice (or even thrice) as much as it does for passenger vehicles. Those trucks wear down the asphalt highways at a tremendous rate (especially in the summer months) with their heavy loads and a large amount of them are just “passing through”.
And even if we see less big trucks due to raising the tax, we would still see a benefit from less wear and tear. But seriously, do you think they would drive around Missouri to get to where they are going?!… Neither do I.
Great article, Jim…and if your passing around signs against a sales tax hike again, you know you can put one in my front yard!
Jason
I want to note, as I have before, that Jason is an ASE certified technician at Value Auto Clinic on Gillham, near McGee Trafficway…He speaks with authority on this subject.
…Steve Vockrodt of The Pitch wrote this week that an opposing committee called Missourians for Better Transportation Solutions was established recently. I think it’s going to be difficult to mount a significant opposing campaign, however, given the relative lateness of the hour and the number of special interests lined up on the other side. That doesn’t mean I think it’s going to pass, however. A lot of people are sick and tired of sales-tax increases and there is a strong, inherent resistance to sales-tax proposals, especially when they exceed one-half cent.
A big Thank You goes out to reader Tom Shrout, who alerted me this afternoon to The Star’s endorsement of Amendment 7.
Tom wrote: “Thanks for coming out against Amendment 7. How did the Star get it wrong?”
…To answer his question, The Star is very much enamored with streetcar expansion, and I think the deal between the city and state, enabling tens of millions of dollars in state funds to go for the streetcar, was the determining factor.
I am very torn on streetcar expansion. I like the idea, in theory, but I think it’s a far cry from rapid mass transit, which should be our goal. In Washington D.C., at least five streetcar lines have been proposed. Hundreds of millions of dollars have been poured into the project, and the program has experienced delay after delay and cost hike after cost hike. I think that now, after years of planning and work, only one streetcar is operating; it’s on H Street in downtown DC. I’m not even sure of that; I was in D.C. in May and drove up and down H Street looking for a streetcar, with no success.
You are blaming lawyers? why not dentists? After all, they fix the teeth of the contractors and engineers who will profit. You are really pandering on this one Fitz. I agree that the gasoline tax is a better way. I guess we’ll have to have some bridges fall in before Missouri wakes up.
I didn’t just throw that in for effect, Mike. According to the latest campaign finance report for Missourians for Safe Transportation & New Jobs, the committee had paid two law firms — your old firm, Polsinelli, and the Bardgett firm in Jeff City — $30,220 in legal fees. That’s $30,220 — or 13 percent — of total committee expenditures of $233,000.
Yeah, I think the lawyers are going to make some hefty fees, on the front end and after the election as well, if voters approve Amendment 7.
(Those figures were as of April 21. New campaign finance reports are due on Tuesday, July 15.)
The work you and others did on the Translational Medicine issue gives us, the underdogs on Amendment 7, inspiration and hope.
Readers: Tom Shrout, a St. Louis resident, and his wife Debra lead a campaign committee named Missourians for Better Transportation Solutions, which opposes Amendment 7.
Before retiring in 2010, Tom was executive director of a nonprofit organization called Citizens for Modern Transit. He and Debra now are partners in a consulting company called Avvantt Partners LLC. Avvantt’s primary focus is organizing community support for improved public transit. For two Tom and Debra worked with Jackson County officials to develop a transit education program for Jackson County.
“But seriously, do you think they would drive around Missouri to get to where they are going?!… Neither do I.”
They won’t drive around, but they probably will fuel up before they enter Missouri. When I drove a truck, we never fueled up in Illinois if we could avoid it because of the fuel tax. Ever gassed up your car on the Missouri side of the metro to save a few cents per gallon?
“a third lane for I-70 between the outskirts of Kansas City and the outskirts of St. Louis.”
The tax’s proponents often tout I-70’s rapid, inevitable descent into “a gravel parking lot” as the No. 1 reason for voting yes. But Amendment 7 would provide only $500 million toward the estimated $1.5 billion to rebuild the road, add a lane in each direction and add a second bridge at Rocheport. The remaining $1 billion would have to come from bonds, which means taxes would have to go up again because the government is unlikely to make cuts elsewhere to cover the principal and interest.
“They won’t drive around, but they probably will fuel up before they enter Missouri. When I drove a truck, we never fueled up in Illinois if we could avoid it because of the fuel tax.”
…And if you’re travelling I-70 your coming from Illinois or Kansas (both have higher fuel taxes than Missouri), so we have wiggle room there, but not enough.
You are also correct that there is not enough money from the tax for the extra lane in it’s proposed form.
Maybe a toll is the correct answer, even though I #%&*@!% hate toll roads. If the trucks can just dodge the fuel tax by filling up before they enter the state, then the rest of us, with our puny 10-15 gallon tanks will end up footing the bill.
The fact that I-70 is made of asphalt doesn’t help much. Maybe construct that third lane of concrete and give it to the trucks. Most truck drivers on I-70 have no idea how to pass another truck anyway, so I say just funnel them into one lane.
I was thinking the same thing, Jason — dedicating the third lane to trucks. But I don’t see how that would work as a practical matter. The truckers would need access to all three lanes, for passing, accidents, etc., and I can’t see the highway patrol enforcing “truck lane” violations…How would you see it working?
“…And if you’re travelling I-70 your coming from Illinois or Kansas (both have higher fuel taxes than Missouri), so we have wiggle room there, but not enough.”
Sure, but how do the fuel taxes for AR, IA, NE and TN compare? A truck’s tanks also can easily last multiple states, so a driver who’s focused on his or her profit margin will fuel a couple of states away in order to avoid paying a premium in a high-tax state. Apps such as Gas Buddy make it so easy to find out, as does CB.
As for toll roads, there’s one thing I never read from any of the media coverage or state collateral: the CapEx and OpEx of a toll road. Are voters supposed to guess that a semi- or fully automated toll system would be more or less expensive?
In a meeting I attended earlier this week with MoDot, it was suggested to raise the money needed a more balanced approach should be used. Raise the gasoline tax, set up some toll roads and consider taxing off road fuel to a small degree. Right now farmers and construction companies do not pay a fuel tax on fuel they use for machinery and equipment off road. Nor do farmers pay any sales tax on farm trucks. A combination of the above with perhaps a small sales tax increase could get the job done. Also get back to using the money for roads and bridges for just that, roads and bridges. Stop trying to do the other things the highway fund was never intended for.
Readers: Dan Coffey is treasurer of a campaign committee named Citizens for Responsible Government, which opposes the proposed streetcar-district expansion and funding. The committee also conducted a successful petition drive to force a public vote on terminal improvements at Kansas City International Airport.
…My opinion, Dan, is that every gallon of gas that is sold in Missouri should be taxed, regardless of the purpose. It’s galling that farmers and construction companies get the break you talked about. So, I guess Clarkson Construction doesn’t have to pay taxes on gasoline it uses in its road graders??? Clarkson — and others like them — making a fortune on road and highway building…I don’t begrudge them their profitable businesses, but it’s maddening that they get breaks on gas purchases, plus wanting a general, three-quarter-cent sales tax to pay for billions of dollars in road, highway and bridge improvements…The rubber’s gotta meet the road on Aug. 7 — no more breaks, no more putting the turd on everyone else’s plates.
@Reality Check…Not sure about your questions regarding expenses, but there is a major difference in road quality between Bonner Springs and Topeka, vs. Blue Springs to Columbia.
Not saying I want a toll road, but if were going improve I-70 the money has to come from somewhere.
The main point however, is that the proposed sales tax increase is a “wolf in sheep’s clothing”. It is in fact a way to generate money for the street car without saying so much. Instead of calling it a “transportation tax”, they should call it a “amusement park ride tax”. But who would vote for that????
@ Jim…In regard to the truck lane, it would probably work best if you don’t allow vehicles over a certain weight to travel in the left lane.
This is how it already is on I-70 coming into Blue Springs on down to the I-435 interchange. On the other side of the state, it’s that way from about Wentzville (I think) on into St. Louis.
Most truck drivers follow this rule without any problem, and I would think it a rarity to see 18 wheeler’s running three wide down the interstate. I was probably a little unfair to the truckers, but too many times I’ve been stuck behind the Schneider truck trying to get by the Wal-Mart (Governed speed difference = 0.185 MPH) for five or six miles on I-70,
As for enforcement, they can already cite you for driving in the left lane except to pass, but don’t usually enforce it unless it is affecting traffic.I’m sure the same would apply here.
Tom Shrout alerted me to a story posted today on the Post-Dispatch web site, which reports that the campaign committee working for Amendment 7 has received more than $2.3 million in contributions in recent weeks.
Here’s the link to that story, written by AP reporter David Lieb, who briefly worked at The Star years ago.
http://www.stltoday.com/news/local/govt-and-politics/money-flowing-to-missouri-transportation-tax-group/article_5905897d-aa61-55da-814a-fa1faf4c8a6a.html
After reading the story, I went to the Missouri Ethics Commission web site and checked out some campaign finance entries.
Here are three totals I found noteworthy:
— The “Industry Advancement Fund” of the Heavy Constructors Association of Kansas City, 3101 Broadway, has contributed a whopping $540,267, by my reckoning.
— The Missouri Constructors “Industry Advancement Fund” has contributed $32,465.
— The International Union of Operating Engineers in St. Louis, Kansas City and Washington each contributed $100,000.
Clearly, the operating engineers have entered into a “six-figure compact.”
Trucks in interstate commerce pay fuel taxes based on the miles they drive in each state. They can bypass MO in fueling but in the end they must pay MO if their fuel purchases in the state are a lesser percentage than the miles driven.
Good to know, Jerry…Thanks.
I once lived in rural Missouri and the farmers not only filled their tractors and combines with no fuel tax paid motor fuels, but also the family car. There was a lot of abuse of that exemption.
Diesel that’s intended for use only on farms and construction sites has red dye added to show that highway taxes haven’t been charged. In February, the Department of Revenue scaled back a program that looks for violations such as the one you describe. I don’t know if The Star covered it, but the Columbia Tribune had multiple stories about the proffered reason: DoR spent $150,000 in 2012 to recover $30,547 in fines and unpaid taxes. But if the abuse is as widespread as you say, then the program wasn’t working very efficiently and effectively.
Thanks for the update. My experience goes back 30 years.
Maybe that’s what led to the dye requirement. I don’t know when that was implemented.
Reality Check: You’re a trove of detailed information regarding the fuel situation — and its taxation — in Missouri. Keep it coming, as appropriate.
Thanks. The dye aspect requires a tip of the hat to Rudi Keller at the Tribune.
Columbia Tribune, I presume…Duly noted.