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Gas taxes just went up in Missouri, but drivers won’t see new road improvements soon

Gas prices in the St. Louis region are at its lowest since November 2003, largely because of the coronavirus pandemic concerns. Missouri also has the lowest gas prices in the nation.
File / Andrea Y. Henderson
St. Louis Public Radio
People buying gas in Missouri are now paying higher taxes for the first time in over two decades. The rate will annually increase by 2.5 cents until 2025.

People buying a gallon of gas in Missouri are now paying 2.5 cents more in taxes, but tangible road improvements are a while away.

At the end of the 2021 legislative session, Missouri lawmakers for the first time in over two decades voted to increase the gas tax effective Oct. 1.

Gas buyers in Missouri used to pay 17 cents per gallon in taxes, one of lowest rates in the country. Now, the tax has increased to 19.5 cents per gallon. It will continue to rise by 2.5 cents each July until it reaches a final rate of 29.5 cents per gallon in 2025. The total increase is 12.5 cents.

Rep. Becky Ruth, R-Festus, sponsored the bill in the House and defended the legislation during an hours-long debate on the floor, which included the defeat of an attempt that would have required the public to approve the increase in an election.

“Throughout every corner of the state, there are projects lined up, but we just need the money,” Ruth said.

Missouri's unfunded transportation needs

Although the first step of the increase just went into effect, Missouri already has a published index of what new projects could be newly funded called the High Priority Unfunded Needs List.

The list totals around $2.5 billion with identified but unfunded transportation needs broken up into two tiers. The first includes projects likely to be on the short list for when the state begins to accumulate new funding.

Those 63 projects have an estimated cost of $539 million. Seven of them are within St. Louis and its surrounding counties and are estimated to cost a little less than $200 million.

Tom Blair, St. Louis district engineer for the Missouri Department of Transportation, said one of the proposed projects involves work on a section of Interstate 270 in north St. Louis County that is currently only two lanes in each direction.

“So this is a very narrow bottleneck that we have not been able to secure the funds for yet, and we’re really excited about having the opportunity possibly to secure those funds and turn that into reality,” Blair said.

Other projects on the short list in the St. Louis area include:

  • “Major interstate reconstruction” that would reconfigure access to St. Louis Lambert Airport on I-70.
  • Adding lanes on I-55 in Jefferson County. 
  • Addressing condition and expansion needs where I-64 and I-70 intersect in St. Charles County.

The Department of Transportation works with local planning partners across the state to determine what transportation needs exist and require attention. For the St. Louis region, that organization is the East-West Gateway Council of Governments.
Jerry Blair, director of transportation planning for East-West Gateway, said the organization is responsible for creating two plans: one that is updated every four years and another that's updated annually.

“The long-range plan gives kind of the large vision for the region. And then the transportation improvement program is kind of the implementation arm of that,” he said.

Although some of these immediate needs have already been identified, those needs are not yet funded. In order for that to happen. they have to make it onto the five-year-long Statewide Transportation Improvement Program.

Tom Blair said the department reevaluates the plan once a year. It was most recently updated in July. The earliest these unfunded projects could appear on the plan would be in the next edition, he said, which he hopes will be next July.

As to how many of the unfunded projects would appear on the plan, that depends on how much more money the state receives.

The rebate complication

Once the tax is fully implemented in five years, Missouri could receive an estimated $500 million in additional revenue annually. Cities and counties would each get 15% of that. That theoretically leaves around $350 million for the Department of Transportation.

However, the rebate option included in the new tax hike complicates how Missouri will calculate how much extra funding it will receive.

People who buy gas in Missouri can elect to go through a rebate process. Some lawmakers in support of the option said it was a way for Missourians and others paying for gas in the state to “vote” on whether they wanted their money to go toward Missouri’s roads on a yearly basis.

Jerry Blair said East-West Gateway is hesitant to make plans for this new revenue because of a lack of certainty of how much the state will receive. Possible funding from a not-yet-passed federal infrastructure bill is also a factor.

“We simply don’t want to speculate and create expectations for things that may not occur until we have more clarity,” he said.

Missouri Department of Transportation Director Patrick McKenna said the state is being conservative with its estimates and right now is preparing for 20% of total money accumulated through gas tax sales to return to the consumer.

One group McKenna said is likely to take advantage is businesses whose vehicles are under the weight limit and therefore qualify for the rebate, such as FedEx and Amazon.

“That easily could take 10% off the top of the revenue, just with that alone,” McKenna said.

However, there still is no way of knowing how many people will take advantage of the rebate. Rep. Don Mayhew, R-Crocker, voted against the tax hike, preferring it to go to the people for a vote along with the increase being less than 12.5 cents. He believes the rebate process is more complicated than proponents made it out to be.

“There will be folks who will attempt it, and they will be frustrated by the process,” Mayhew said.

He said he hopes next session to clean up some of the rebate language, including removing the requirement to include the vehicle identification number.

The tax increase isn’t the only amount of additional transportation funding the state could receive. Missouri, along with other states across the country, is waiting to see if the federal government will pass its own infrastructure bill. McKenna said if the state does receive federal funding, that predicted amount in combination with the new gas tax revenue comes close to aligning with an unfunded needs list the state came up with two years ago.

“If we were to settle on that alone, we would have the exact plan to bring forward,” McKenna said.

He said it will likely take a few years for the state to have a good grip on how much new funding to expect on an annual basis. Meanwhile, he’d rather plan on working with less than more.

“If I was to not project any of that rebate into the plan, we might overprogram our construction program and get communities thinking that a particular project is gonna start say next year, and if the revenue doesn’t come in, it may not be able to,” McKenna said.

Follow Sarah Kellogg on Twitter:@sarahkkellogg

Sarah Kellogg is a Missouri Statehouse and Politics Reporter for St. Louis Public Radio and other public radio stations across the state.