FRANKFORT, Ky., and JEFFERSON CITY, Mo. -- Kentucky and Missouri are two of the latest states to revisit their gasoline-tax setup as transportation funding woes escalate.
Kentucky Roadblock
Kentucky lawmakers have been discussing the possibility of freezing the state gasoline tax to shore up infrastructure funding, according to Glasgow Daily Times. The tax, which is currently 27.6 cents per gallon (CPG), readjusts every three months based on the average wholesale gasoline price. Because of declining wholesale prices, the tax is set to fall 5 CPG on April 1. Each 1-cent decline in the tax sets the state’s Road Fund back $30 million, so the scheduled drop would mean a $150 million drop in revenues for the fund.
While Democrats in the state’s House of Representatives voted last year to freeze the tax at 30.8 CPG, a majority in the Republican-dominated Senate did not advance the bill, the Times reported. After an election season during which Republican candidates accused Democratic incumbents of trying to raise taxes, the Democratic representatives have refused to vote on an increase in the gas tax until the Senate does first.
Senate president Robert Stivers (R), who supports freezing the tax, told reporters that he “wouldn’t want to give you odds” on the chances for a vote on freezing the tax because some Republicans would interpret it as a tax increase. The state’s current legislative session ends this week.
Stivers believes the tax should be frozen to ensure infrastructure upgrades to help support current and future population growth along the state’s major highways, and to repair damage from the past two winters.
“We need to make sure—though I’m not sure how we do it—that we have a way to keep our infrastructure in place,” he said.
Muddled in Missouri
In Missouri, a bill is pending that would increase the state gasoline tax by 2 CPG per year for three years to prevent big cuts in road-construction funding at the Missouri Department of Transportation (MoDOT). According to a story in The Joplin Globe, what MoDOT calls the “2+2+2 Plan” is the basis for a bill introduced by state Sen. Doug Libla (R) and related House bills. Through the plan, the state’s current gas tax would rise over three years from 17.3 to 23.3 CPG, and then change each year based on the consumer price index.
The plan is being billed as an answer to MoDOT’s pending budget cuts, which became a potential reality after voters in the state rejected an amendment that would have placed a 0.75-cent tax on gasoline for 10 years to fund the department.
If an increase is not approved, MoDOT will enact an austerity spending plan, the 325 System, which would cut construction spending from its current $600 million to $325 million in 2017. The newspaper noted that by then, MoDOT would not be budgeted enough money to earn matching federal funds for highway projects.
Should the state legislature pass a fuel tax increase, collection would start on Jan. 1, 2016.
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