The topic was transportation when business and government leaders gathered on March 30 for the Legislative Update luncheon sponsored by Progress 64 West, a civic organization dedicated to improving life along the I-64 corridor in St. Louis and St. Charles counties.
Moderated by John Nations, president and CEO of Bi-State Development Agency, the topic quickly turned to road improvements and how to pay for them. One potential answer is Missouri Senate Bill 617 that its sponsor, Sen. Bill Eigel [R-District 23], called the “largest tax cut in the history of the state of Missouri.” SB 617 could raise Missouri’s motor fuel tax to fund road improvements while lowering the state’s income tax and corporate tax rates.
Eigel, who represents an area near Weldon Spring in St. Charles County, said his bill – tax overhaul legislation – sailed through the state Senate last week with little debate and was advancing toward final passage.
The bill was one of a number of legislative options for raising money for transportation discussed at the luncheon by a panel that included Sen. Jill Schupp [D-District 24], Rep. Bob Burns [D-District 93] and Sen. Dave Schatz [R-District 26] in addition to Eigel.
Eigel’s bill would lower the state’s 5.9 percent income tax rate to 5.25 percent for most state taxpayers. To offset the cuts, the state would end the federal individual and corporate tax deductions and cap low-income tax credits at $135 million. The bill also would phase in an 8-cent increase in the state’s 17-cent motor fuel tax along with a consumer price index adjustment to those fuel taxes until 2025. Eigel said his bill would provide an extra $2.5 billion for roads and bridges over the next 10 years.
“I think we have a good product here,” Eigel told luncheon attendees. However, he questioned whether the state’s voters would approve increases in motor fuel taxes. “I think, and I share this with a lot of my constituents, [that there are] concerns that increases in any kind of tax have not been, typically, well received,” Eigel said. “We polled, and I’ve seen very recent data that indicate that, if a vote on a fuel tax would go to the people, the results would not be affirmative.
“What I’m trying to do with Senate Bill 617 is offer an avenue where we can see a short-term increase in fuel tax to provide [transportation] funding, [while] at the same time, what we’re doing is as a part of a broader tax measure that will lower the overall tax burden for taxpayers.”
But Eigel’s enthusiasm drew a tepid public response from at least one local legislator.
Schupp, although lauding Eigel’s willingness to work with Democrats as well as Republicans on the more than 400-page bill, said, “It’s not a bill, at this point in time, I’m willing to support.”
She said it’s necessary for state legislators to do something about roads and bridges given the reports about some bridges she’s seen. “How can any of us want to wait until there is a major accident and people lose their lives because we didn’t step up to the plate and do what we need to do for funding transportation infrastructure?” But she questioned whether the legislation would be “revenue-neutral” meaning it would not lower state revenue appreciably. Schupp pointed out that the state already implemented two tax cuts in a gradual tax reduction in 2014 and that a federal income tax cut signed by President Donald Trump could affect general revenue moving forward.
Schupp said she didn’t want to take money out of the general revenue, which funds public education, and leave children with less than they deserve.
“General revenue neutrality will at least ensure that we have the money we currently have in the budget to support public education, and that includes higher education, and some of the other elements that are funded out of our general revenue budget,” Schupp said. “I don’t want to walk down the yellow brick road to becoming Kansas and that’s was one of my concerns.”
Schupp said all of these pieces – higher education, public education and infrastructure – have to be looked at together “before we start putting into place continued tax decreases, as much as my constituents would love to see and that and I would love to give it to them.”
“We have to make sure we fund those things that we know are important for the economic growth and the growth of the people of the state of Missouri,” Schupp said. She added that she looked forward to working with her fellow senators in achieving that goal.
In regard to other bills being considered to raise transportation funding, Schatz said there are several other bills being heard by the Senate Transportation, Infrastructure and Public Safety Committee, of which he is chairman.
One bill, Senate Bill 734, would allow a 10-cent increase in gas and diesel fuel taxes. Another bill, Senate Bill 1050, would authorize a four-tenths-of-a-cent sales tax. If approved, the sales tax would fund the Missouri Highway Patrol, allowing $250 million in road funding currently used to fund the patrol to be shifted to road and bridges. Both measures would require a vote of the people.
Schatz said a 10-cent increase didn’t do well in polling among voters. Like Schupp, he voiced concern about deteriorating roads and bridges. “We’re committed to trying to find a way, we obviously cannot continue to ignore the problem and kick the can down the road,” Schatz said.
Burns told those gathered that everybody coming to Jefferson City talks about the importance of education and fixing roads and bridges to spur economic development. He added that he hoped it wouldn’t take a tragedy to spur something getting done.
He noted that hotels, like the DoubleTree in Chesterfield where the legislative update was held, now are required to have sprinkler systems above the first floor. He said that requirement stems from a 1982 fire in the MGM Grand Hotel in Las Vegas that prompted a national outcry.
“I hope we never have a road or bridge collapse and a bunch of people get killed like what happened in Florida a few weeks ago to get us to get something done on this,” Burns said in regard to transportation funding.
Meanwhile, Nations noted that other transportation issues have the potential to impact the state’s economy. He pointed to a report published by a statewide transportation task force in January that talked about funding and changing technology such as Uber, alternative fuels and self-driving cars.
Nations also noted that the state’s transportation system is critical to the movement of freight, which is another economic factor for the state. He noted that Bi-State and the St. Louis Regional Freightway announced on March 27 that they had signed memorandums of understanding with the Port of Plaquemines in New Orleans and American Patriot holdings with the goal of increasing freight movement along the Mississippi River.
Burns, who sits on a legislative transportation subcommittee on barges and docking facilities, said that the state has a “big economic advantage because barges moving upriver from Louisiana don’t have to be broken down” when traveling on the Mississippi until they reach the locks and dam at Alton. He said some issues being worked on by the subcommittee include dredging rivers to keep them deep enough for barge traffic and the replacement or repair of the 127-year-old Merchants Bridge across the Mississippi River in downtown St. Louis.
Schatz noted that an increase in the present fuel tax is the right way to go today but in “15 to 20 years from now we may have to look at something that is more technology driven” as alternative fuels and the possibility of driverless vehicles come into play. He also sees more pressure on state roads as ports get more developed. More and more items being be shipped there will be placed on trucks for delivery, he said.
About a third of the present fuel tax is paid by nonresidents, Schatz said as an argument for increasing that tax. “It’s the smartest way to do it, it doesn’t put the whole burden on the citizens of Missouri,” he said.
Although opinions differed on the panel and around the room regarding the best approach to transportation and road funding, one thing everyone agreed on was that legislators must work together and be open to resolving the debate over the long haul.