Missouri Lawmakers Pass First Gas Tax Hike In 25 Years

Posted May 12, 2021

JEFFERSON CITY, Mo. (AP) — Missouri’s gas tax could soon rise for the first time in 25 years after the state’s Republican-led Legislature passed a gradual increase that is projected to raise hundreds of millions of new dollars for roads and bridges.

Republican Gov. Mike Parson, who has made infrastructure a priority, praised lawmakers on Wednesday for shepherding the contentious measure to passage and indicated he is likely to sign it into law.

“This bill provides much needed funding for road and bridge repairs, and we are excited to move forward on these critical infrastructure projects,” Parson said in statement.

The bill would raise Missouri’s 17-cent-a-gallon gas tax — among the lowest in the nation — by 2.5 cents a year, starting Oct. 1, until the tax hits 29.5 cents per gallon in July 2025. That would make Missouri’s rate closer to the national average for states.

Drivers could get a refund if they save their gas receipts and submit them to the state — an unusual provision modeled after one in South Carolina. The measure also would increase electric vehicle fees by 20% annually for five years, with fees varying by the size of the vehicles.

Since 2013, at least 29 states — some led by Republicans, others by Democrats — have raised fuel taxes. But that momentum slowed during the pandemic. Missouri’s increase would be the first since Virginia lawmakers passed a gas tax increase in March 2020, shortly before the coronavirus shutdowns.

The Missouri House voted 104-52 to pass the measure late Tuesday night after a heated debate among divided Republican lawmakers. Fifty-seven Republicans, including House Majority Leader Dean Plocher, joined with Democrats in voting for the bill. Fifty-two Republicans, including House Speaker Rob Vescovo, voted against it.

The measure, sponsored by Senate President Pro Tem Dave Schatz, passed that chamber in March with Republicans similarly split.

The Missouri Department of Transportation has estimated that the state faces a $745 million annual funding gap for roads and bridges.

“I don’t know how much longer we can keep kicking that can down the road,” said Republican Rep. Becky Ruth, who helped craft the legislation. “We have an opportunity to invest, make an investment in our roads and bridges, help economic development, bring jobs here and make roads safer.”

Once fully implemented, the gas tax hike could generate more than $500 million annually for state, county and city roads. But it’s unclear how much of that governments will get to keep after some people request refunds.

Critical House Republicans argued the tax hike would impact low-income families the most since the tax rate is the same regardless of income, and pointed out that it might be more difficult for people who don’t own smartphones to track receipts for a refund.

Several said the tax increase should be put on the ballot so voters can weigh in, but that proposal failed 102-48.

Other Republicans framed support or opposition to the tax hike as a test of conservativism.

GOP Rep. Dottie Bailey said to colleagues who back raising the gas tax without going to voters: “Don’t even call yourself a Republican.”

“This is why people hate government,” she said.

Republican Rep. Justin Hill predicted the GOP would face a voter backlash in the 2022 elections.

“This is how you lose a super majority,“ Hill said.

Tax increases are widely unpopular among Missouri voters. Since voters approved a constitutional amendment in 1996 requiring all tax increases over a certain amount to go to a statewide vote, not a single general tax increase has passed.