Missouri lawmakers pass gas tax hike that would begin this fall with refund option

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Missouri drivers will likely pay more at the pump starting this fall after lawmakers passed a bill to raise the state’s gas tax for the first time in more than two decades.

The measure, sent to Gov. Mike Parson’s desk late Tuesday night, would add 2.5 cents to the current 17-cent-per-gallon tax beginning in October to pay for road and bridge repairs. It would rise over the next five years to a 12.5-cent-per-gallon hike.

The bill passed the House 104-52 after surviving a number of attempted amendments by conservative Republicans that would have effectively scuttled the legislation with three days left in the session.

Voters in recent years have rejected gas tax increases at the ballot box, most recently in 2018. The bill allows drivers to opt out by applying for a refund, supported by receipts.

Proponents of the hike have long bemoaned the state’s highway and bridge repair needs. In 2019, the Missouri Department of Transportation reported $825 million in annual unfunded “high-priority” improvements.

Missouri’s gas tax is the second lowest in the nation, according to the Tax Foundation, but it has the seventh-largest highway system and the sixth-most bridges. Kansas’ tax is 24 cents per gallon for gasoline and 26 for diesel.

The bill would raise up to $514 million annually by 2027 for repairs by MoDOT and local governments. It’s not clear how many would seek the refund. In South Carolina, 79,000 claimed a total of $3.4 million in gas tax refunds in 2020, four percent of what was available.

“If you do not want to invest in our roads and bridges, you do not want to pay those extra taxes, then you have the option of getting that rebate and taking your money back,” said House Transportation Chair Becky Ruth, a Festus Republican. “I don’t know of any other tax that you can get 100% of your money back.”

Senate President Dave Schatz, a Sullivan Republican, has made raising the tax a priority for the session. Gov. Mike Parson has supported increases in the past.

But in the House, Speaker Rob Vescovo, an Arnold Republican, has previously opposed it. After the bill passed the Senate this year, an unlikely coalition led by the Missouri Chamber of Commerce and the Missouri AFL-CIO launched a campaign to get the increases through the House, touting economic benefits and jobs for construction workers.

The groups released a report estimating the bill would create 17,000 jobs annually and have a $1.8 billion economic impact.

The bill’s passage comes as Missouri is flush with record revenues thanks to an influx of federal pandemic aid. The state will receive $2.7 billion from the American Rescue Plan and expects more from a Biden infrastructure package.

But Schatz said the one-time federal money “doesn’t come close to meeting the needs that have been delayed.”

Debate over the increases divided Republicans and heightened tensions between the chambers, where legislators were pushing to get their priorities across the finish line in the waning hours of the session.

Rep. Jered Taylor, a Republic Republican, accused Senate leaders of threatening to kill his bill to nullify federal gun laws in Missouri, a proposal favored by Vescovo, if he amended the gas tax bill. After the vote, Schatz said the claims were “patently false.”

The House’s most conservative and anti-tax lawmakers accused fellow Republicans of siding with the Democrats, all of whom supported the measure. Others criticized the bill’s supporters of raising a sales tax, usually disproportionately borne by lower-income people, and passing a refund that few would be able to go through the trouble of claiming.

“We’re a Republican supermajority,” said Rep. Cheri Toalson Reich, a Hallsville Republican. “Why don’t we act like it?”

The bill was nearly derailed by an amendment from Rep. Jason Chipman, of Steelville, to put the matter to another statewide vote next year.

After that was overwhelmingly defeated, Rep. Tony Lovasco, of O’Fallon, proposed to split the bill and separate the gas tax from another provision to increase decal fees for alternative fuel vehicles. That briefly threw the House into disarray over how to handle the rare procedural move. Lawmakers ultimately voted to keep the bill together.

“This is an investment in our roads and bridges,” Ruth said. “When we talk about conservative values, taking care of roads and bridges is conservative. It’s a duty that we have and something we do not need to pass on to our grandchildren.”

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