I really wanted to like Proposition D.
I spend enough time on Missouri roads – including the rapidly dying U.S. Highway 50 from Union to Jefferson City – to accept that major improvements are needed, and, that improvements cost money. Plus, after opposing the last two transportation tax proposals because they included a general sales tax (after the legislature exempted tractor trailers and other big trucks from paying sales tax), I hoped the next try would be better.
Alas, Prop D is just more bad. To review…
Official Ballot Title: Shall Missouri law be amended to fund Missouri state law enforcement by increasing the motor fuel tax by two and one half cents per gallon annually for four years beginning July 1, 2019, exempt Special Olympic, Paralympic, and Olympic prizes from state taxes, and to establish the Emergency State Freight Bottleneck Fund?
If passed, this measure will generate at least $288 million annually to
the State Road Fund to provide for the funding of Missouri state law
enforcement and $123 million annually to local governments for road construction and maintenance.
Forget that part about exempting Special Olympic gold medals and such from taxes…that was an exceptionally non-controversial proposal, a stand-alone, feel-good bill from Representative Jean Evans (R – Manchester). When advocates needed a moving piece of legislation which involved state taxes to become the vehicle for the fuel tax increase, well, strange things happened in Jefferson City. The fuel tax became an amendment to that medal bill.
So, after the backroom deals and some strange public statements – where some House members who voted for the bill explained that they’d be voting against it in November – Proposition D passed the House of Representatives with 88 votes (out of 163 possible).
If approved by voters, the fuel tax, paid on gasoline and diesel, would increase by 2¢ each year, till a 10¢ a gallon hike (to 27¢ a gallon) became reality in 2023.
Yes, that price tag ($288 million for the state plus $123 million for local roads) makes this the largest tax increase in Missouri history. Consider it dead.
Still, here’s why I’m opposing Prop D:
❶ Fuel taxes are regressive, taking a bigger bite out of skinnier wallets.
❷ Taxing diesel and gasoline the same is a gift to truckers. The old argument used to be that semi-tractors got about six miles per gallon while cars got 20 mpg, so, truckers paid three times as much as cars. Today many big rigs get 10 or more miles per gallon, and, as more fuel efficient rigs hit the road a fleet average of 12 mpg is in reach, meaning trucker’s share gets less fair.
❸ Taxing fuel as all vehicles get more efficient means a declining, not a growing, revenue stream.
❹ It’s stupid to expect a tax increase to get by voters when the majority party worships tax cuts, no matter what damage they cause.
❺ Prop D is Jefferson City’s version of Three Card Monte. The plan calls for funding the state patrol with new dollars and more dollars, then trusting the legislature each year to appropriate the money they would have spent on the patrol on road projects. Yes, just like casino gambling led to more education funding and the tobacco settlement funds resulted in more drug prevention money, Missourians are once again asked to trust Republicans to do the right thing.
Okay, what do I suggest?
Don’t go to voters. Missouri is allowed to increase tax revenue by just under $100 million each year by legislative action. A plan of five years of targeted increases can yield even more for roads than Prop D in the best of circumstance.
Year One: Increase the tax on diesel fuel by 12¢ a gallon. (If that causes cross-country truckers to not tear-up Missouri highways we get a ‘two-fer.’)
Year Two: Restore the sales tax on big trucks.
Year Three: Institute a surcharge of 2% of value to the sales tax bill for all new vehicles for the value above the prior year’s Missouri median income. In round numbers, that’s $55,000 now, so, a $60,000 car would get hit with a luxury tax of $100. (The math is easier to calculate than you might think, and, car dealers won’t miss a sale over a puny luxury tax.)
Year Four: Change the formula for license plate renewals. Instead of horsepower, charge 2% of vehicle value every two years, plus a $25 charge for the plates. That $60,000 car would pay $1,225 for two years of plates – less than $1.70 a day. That way the working stiff with a 10 year old pick-up would pay, say, $135 for his plates [$5,500 x .02 + $25 ]. Yes, an increase but a more equitable one.
Year Five: Increase the fees for trailers. Look at Missouri highways and see all the towed boats, semi-tractor rigs, U-Haul trailers and such. A small increase per trailer could become real money.
I know, you planned to stretch your checkbook to just afford that new S class Mercedes. Now you might have to settle for a mere E class. Life is tough.
Please make up your own mind on Proposition D. It’s not the worst thing out of Jefferson City this year, to me it’s just not the best.
Glenn