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States increasing fees, taxes to pay for roads

By David A. Lieb
Associated Press

JEFFERSON CITY, Mo. (AP) — For nearly a century, Missouri has taxed drivers to pay for its roads.

That always provided enough money, until now.

On Tuesday, voters will decide on a historic change that would tax virtually everything they buy in order to yield more money for roads and bridges.

With Congress stymied over long-term highway spending, many states are assuming the politically uncomfortable task of raising money for their aging transportation systems. In the past year and a half, one-fourth of the states have increased taxes, fees or fines, and at least a dozen others are studying options, according to an Associated Press review.

The push comes as the traditional revenue sources, federal and state fuel taxes, have deteriorated because of more fuel-efficient vehicles, more people driving less and stagnant tax rates.

Support for the increases has come from Democrats and Republicans, even in tax-averse states such as Missouri, where the Legislature has been cutting income taxes.

“Tax increases are very, very hard to pass,” said Missouri Sen. Mike Kehoe, a Republican who supports the measure on Tuesday’s ballot for a three-quarters cent sales tax increase. “But I think that people do look at infrastructure differently … as an investment.”

vehicles move along a section of Interstate 70 in Foristell, Mo. Missouri voters will decide on Aug. 5 whether to allow the state's first general sales tax for transportation projects, such as the proposed widening of I-70 to three lanes from St. Louis to Kansas City. (AP Photo/Jeff Roberson)

Vehicles move along a section of Interstate 70 in Foristell, Mo., on Wednesday. Missouri voters will decide Tuesday whether to allow the state’s first general sales tax for transportation projects, such as the proposed widening of I-70 to three lanes from St. Louis to Kansas City. (AP Photo/Jeff Roberson)

Congress agreed Thursday to a 10-month patch for the federal Highway Trust Fund, which was running out of money to cover all of its commitments to the states. But a long-term plan remains unresolved, and the stalemate already has caused delays for some projects, such as highway improvements in Tennessee and bridge replacements in Arkansas.

Federal money accounts for more than a quarter of states’ total spending on highways and transit infrastructure, according to the Pew Charitable Trusts.

“I just don’t think we can count on any more federal dollars coming in than what we’re currently getting, and we should assume that money is going to drop,” said Rep. Dave Hinson, a Republican who sponsored Missouri’s proposed transportation sales tax.

States already are facing shortfalls in their own transportation revenue.

According to the U.S. Department of Transportation, local governments would need to spend as much as 50 percent more to pay for all the work needed on roads, bridges and mass transit.

In Michigan, two-thirds of the roads are projected to be in poor condition by 2020, yet a proposed tax increase has stalled.

Missouri’s highway budget is projected to plummet from a recent high of $1.3 billion annually to $325 million by 2017. There is no backup to replace that money if voters don’t approve a sales tax that is projected to raise at least $540 million annually.

Construction contractors, labor unions, engineering firms and others have poured more than $4 million into the Missouri sales tax campaign and have spent at least 100 times more than their opponents. The advertising blitz is a necessity because Missouri voters have a history of rejecting tax increases.

Opposition is coming from both staunch conservatives, who oppose most tax increases, and strident liberals, who fear the sales tax would hit the poorest the hardest while demanding nothing from the heaviest highway users. The sales tax increase would not apply to tractor-trailer rigs, which were exempted under a 2012 law.

“The absurdity of it is if you go out and buy your child a toy truck, and then you go out and buy an 18-wheeler,” said Thomas R. Shrout Jr., a St. Louis consultant who is treasurer of the opposition group, “you’re going to pay more road tax on the toy truck than you are for the 18-wheeler.”

Transportation tax increases already have run into problems in some states. Last year, voters in nine of Georgia’s 12 transportation districts defeated a sales tax increase, and Seattle-area voters rejected a transportation sales tax and vehicle fee increase in April.

Other states have pushed ahead with increases without putting them to a widespread vote.

New Hampshire Gov. Maggie Hassan, a Democrat, signed a 4-cent-a-gallon fuel tax increase that took effect in July, the first such increase since 1991. Republican Wyoming Gov. Matt Mead signed legislation last year raising the fuel tax to 24 cents a gallon from the 14-cent rate.

Maryland, Massachusetts, Pennsylvania and Virginia recently enacted significant measures to pay for transportation spending. Texas voters will decide in November whether to divert about $1 billion annually to transportation from the state’s Rainy Day Fund.

In many states, the plans have taken several years of bipartisan coalition-building, said Tony Dorsey, spokesman for the American Association of State Highway and Transportation Officials.

“States are realizing that they have to fund transportation projects in big ways,” he said. ”You know, our system is aging.”

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