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County considers loaning transportation sales tax money to MoDOT

St. Charles County Executive Steve Ehlmann is mulling the idea of lending the Missouri Department of Transportation money that would help them obtain federal dollars for county road projects.

The source of that money could be the county’s half-cent transportation sales tax, which is administered by the county’s 12-member Road Board.

“Can we lend money to MoDOT?” Ehlmann asked. He proposed a possible scenario. “We lend them Road Board money, for instance, to use, say, on Hwy. N, which is the next big project we’re interested in. Can we give them, say, $10 million in Road Board money and they (MoDOT) go ahead and use it to get $40 million in federal money to do that highway?”

Right now, the use of county funds is pure speculation, but Ehlmann said local officials are researching the idea and talking with MoDOT officials. However, he stressed that no decisions have been made on using county transportation sales tax funding in this way.

The half-cent sales tax, approved by voters in 1985 and since reauthorized in three elections, generates about $20 million a year that is allocated based on Road Board recommendations.

Ehlmann said, for now, the county’s roads are in good shape but state roads need work. However, county officials are looking to improve portions of Hwy. N to correct safety concerns, including turning it into a four-lane road.

Meanwhile, MoDOT Interim Director Roberta Broeker earlier this month said, “You don’t want to rule anything out. (But) the problem with borrowing money is you have to pay it back.”

State and federal fuel taxes provide the bulk of revenue for state transportation projects in Missouri. But the state’s 17-cent gasoline tax remains one of the lowest in the nation and hasn’t been raised since 1992. State voters also rejected a transportation sales tax increase proposal last August that would have raised $500 million annually. That combination has caused MoDOT to cut back. Earlier this year, the transportation department outlined its “Missouri 325 System” plan, explaining how it would use its funding beginning in September 2017 – mostly for maintenance and rehabilitation of existing primary roads.

Federal highway dollars often pay 80 percent of road project costs if there is a 20 percent local match. However, MoDOT has said it would not have enough money to provide the 20-percent match needed to acquire federal funding and that funding could be lost to other states.

In the recent legislative session, a proposal to raise the state’s gasoline tax by 2 cents – raising about $40 million to help obtain $167 million in federal matching funds – failed due to a lack of action. And, while Ehlmann and other officials say transportation funding is expected to be a priority during the 2016 legislative session, Broeker said there may be a question whether a two- cent increase would be enough. Four cents might be better, she said, although the state has not updated its funding evaluation.

The thought was that a gasoline tax increase approved in the last legislative session would be imposed on Jan. 1, 2016, she said.  Enough new revenue then would be collected so that by the time September 2017 rolls around the state would have money for matching federal funding.

Passing an increase in 2016 would delay the imposition of a gasoline sale tax until possibly Jan. 1, 2017, leaving less time to collect revenue before September 2017.

Another priority that requires federal dollars is completing a study of the Interstate 70 corridor, which, along with an I-270 corridor study, have been shut down.

Ehlmann said the service roads along I-70 have been makeshift at best. Studies suggest that 50 percent of the county’s sales tax revenue and jobs are located within 1 mile on either side of the interstate, he said, adding that about 20 percent of the property in the corridor isn’t developed because it’s hard to get to.

“The fact is that if you don’t do these studies and the money becomes available, you’ve got a two- or three-year waiting period before you can get anything done,” Ehlmann said.

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