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New fuel tax proposal includes option for a rebate

BY CASEY MURRAY Missouri News Network
Missouri News Network

A proposal to raise Missouri’s fuel tax has been introduced to the state Senate — this time with a twist.

The issue has arisen several times over the years because of concerns that the Missouri Department of Transportation is underfunded. Money generated from the fuel tax goes to that department.

Missouri is ranked 48th in the nation for revenue-per-mile from the tax, but has the seventh largest highway network, according to a report by MoDOT. The department has $8 billion to $10 billion in unfunded need, according to Director Patrick McKenna.

Sen. Dave Schatz, R-Sullivan, who sponsored the new bill, said that if the state doesn’t have better infrastructure, it will have a hard time attracting new business and residents.

“It doesn’t take a rocket scientist to figure that out that you cannot maintain a system, one of the largest systems in the United States, being ranked 48th in funding.”

During the last legislative session, four bills were introduced to raise the tax, which is currently 17 cents per gallon, but none were successful. Previous attempts to raise the fuel tax were shot down by Missouri voters.

However, Schatz has now reimagined the legislation based on the fuel tax in South Carolina.

In that state, people can apply for a tax rebate that refunds the money paid for the increase amount. Schatz is proposing that the tax increase by 2 cents each year until 2026.

Schatz said the rebate option allows people to choose if they want the money back or to leave it with MoDOT.

“A couple years ago, over a million people voted for an increase in road funding,” Schatz said. “So I think that a strong number of people will say, ‘Hey, I’m gonna go ahead and leave the investment there so that we can have better roads and bridges,’ but it’ll give people the option. So that’s kind of the philosophy of allowing people to choose.”

He said in South Carolina about 15% of those eligible asked for a rebate. In 2020, South Carolina reimbursed about $3.4 million to drivers, while the department of transportation pocketed $502 million, according to a government report. Getting the rebate in South Carolina requires saving receipts from gasoline purchases.

Schatz is hoping that the refund component will make the tax increase acceptable to some lawmakers who have opposed it.