Transportation Sales Tax

Constitutional Amendment 7

Title: Missouri Treasury Sales and Use Tax Increase for Transportation

What It Is:

A constitutional amendment which proposes a .75% sales tax increase. The duration of the tax will be no longer than ten years, but a vote will automatically occur at the end of that time, giving the people an opportunity to renew the tax for another ten years. Additionally, establishing toll roads and increasing the gas tax rate would be prohibited during the initial ten year period. The Secretary of State estimates that $534 million would be generated annually, with $480 being allocated to state projects and $54 being allocated to local projects. Passage of the amendment would repeal Article IV, Section 30(d) of the Missouri Constitution and replace it with two new sections: 30(d) and 30(e).

General Assembly Vote:

Senate: 22-10 (69% Yes & 31% No)
House: 105-43 (71% Yes & 29% No)

Pro Arguments:

  • MoDOT estimates that $485 million is required to maintain roads in their current condition each year, but funds are projected to drop to $325 million annually by 2017. In other words, funds are supposedly needed to preserve current infrastructure, let alone improve it. (The department attributes this decline to several factors, including inconsistent federal funding, decreased fuel taxes revenues due to more fuel-efficient vehicles, and increased construction costs.) 
  • Priority would be given to “repairing unsafe roads and bridges.” 
  • A fiscal note will appear on the ballot which says that sales tax revenues cannot “be diverted to other purposes.” 
  • The measure would create construction jobs throughout the state.

Primary Supporters:

Rep. Dave Hinson (R-119) – Sponsor, Transportation Committee
Rep. Dave Schatz (R-61) – Cosponsor, Chair of Transportation Committee
Sen. Mike Kehoe (R-6)
US Sen. Claire McCaskill
David Nichols (Director of MoDOT)
Missouri Chamber of Commerce and Industry
Missourians for Safe Transportation & New Jobs Inc.,
Missouri Transportation PAC

Con Arguments:

Left: Democrats argue that the amendment does not give enough attention to alternative forms of transportation. Jay Nixon has added that “The burden of this $6.1 billion sales tax increase would fall disproportionately on Missouri’s working families and seniors by increasing the cost of everyday necessities like diapers and over-the-counter medication, while giving the heaviest users of our roads a free pass.”

Right: Conservatives oppose the amendment out of a general disliking for tax increases. They point to the fact that the .75% sales tax increase would not only be the first statewide tax increase since 1993, but the largest tax increase in state history as well. According to 2014 Tax Foundation data, Missouri would have the ninth-highest sales tax in the country after the .75% state increase. Rather than coming up with the funds by cutting unnecessary spending, the
legislature chose the option of raising taxes.

The ballot initiative would allow municipalities to spend revenue on “transportation facilities” such as airports, mass transit systems, railroads, and bike paths, to name a few.

The Tax Foundation and Show-Me Institute oppose the ballot initiative with the opinion that the tax burden is not placed on those who use the roads the most. These groups agree that an increasing user fees and user taxes (such as toll roads, license fees, and gas tax) would be a better, more free-market solution.