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Parson greenlights gas tax increase

JEFFERSON CITY, Mo. — Gov. Mike Parson greenlit an incremental gas tax increase Tuesday, bumping it up to 29.5 cents by 2025. 

A passion project for Senate President Pro Tem Dave Schatz, the legislature gave the final approval for his SB 262 during the final week of session. It incrementally increases the gas tax by 2.5 cents annually beginning in October with the funds earmarked for road and bridge repairs. 

The increase also includes a rebate program, modeled after South Carolina’s program. Drivers will be able to apply through the Department of Revenue once a year to receive a refund for the tax. 

Once fully phased in, the tax increase is expected to generate about $375 million additionally per year for state highways and an additional $138 million per year for city and county transportation needs, according to estimates. 

“Properly maintaining transportation infrastructure is a core function of government,” Schatz said. “Safe roads and bridges keep our economy moving and enable every aspect of our daily lives. In the heart of America, Missouri is at a crossroads: Our transportation system can either be a world-class economic engine or it can be a dangerous anchor that stifles growth. We’ve already seen in neighboring states what happens when government neglects its transportation responsibilities: bridge failures, highway closures, and economic devastation.”

House Transportation Chair Becky Ruth called the signing a “historic day.” 

“Missouri has been lagging behind for years when it comes to investing in our roads and bridges. I’ve been working hard to find a solution to the funding problem and brought the South Carolina model to Missouri,” Ruth said. “I would like to thank the governor for his support, Sen. Schatz for his dedication and sponsorship of the bill, my colleagues in both the House and Senate, and the entire team who worked to get this across the finish line.” 

“With nearly $1 billion in unfunded transportation needs each year, we can no longer wait for another day or another generation. We must change course and address these problems head-on,” Parson said. “SB 262 provides vital revenue that will help us fund essential road and bridge projects all across the state. Quality roads and bridges increase the efficiency and safety of our roadways, invite travelers and business investment, and save Missourians money.”

Jeremy Cady, the state director for Americans For Prosperity-Missouri, filed a referendum petition with the Secretary of State’s Office in an attempt to put the gas tax to a vote of the people. The petition suggested placing the proposal on the Nov. 8, 2022 ballot — more than a year after the first increase would take place. 

Aside from the gas tax, SB 262 also included an increase in fees for alternative fuel decals, the establishment of the Electric Vehicle Task Force under the Department of Revenue, and an increase of 10 years in the maximum age of motor vehicles required to have recorded odometer readings in certain instances. 

It also enacts a lifetime ban on commercial motor vehicle licenses for people convicted of a felony for using those vehicles in “an act or practice of severe forms of trafficking in persons.” 

Both the odometer and commercial motor vehicle licenses provisions contain emergency clauses. 

“SB 262 is a user fee which offers Missourians the opportunity to invest in our infrastructure or allows them to receive all of their new fuel tax back by a simple refund process. It also looks ahead by creating the electric vehicle task force,” Ruth said. “This bill is about an investment in our future, safety, jobs, and economic development for our state.”

“The time is now to make this type of commitment to fixing and modernizing our infrastructure so we can create good-paying jobs and make our economy more competitive,” Dennis Slater, president of the Association of Equipment Manufacturers (AEM), said. “Equipment manufacturers support policies that will help transform our nation’s infrastructure and call on Democrats and Republicans at both the state and federal level to pass commonsense, bipartisan bills like SB 262. We applaud Missouri’s lawmakers for making a significant investment in their roads, bridges, and highways, spurring economic development and supporting the 35,000 equipment manufacturing jobs our industry represents in the Show Me State.”

The bill split Republicans during session with some members, including Rep. Jason Chipman, decrying attempts to increase taxes for Missourians. Missouri has the second-lowest gas tax in the country. 

This story has been updated with statements from Gov. Mike Parson and AEM.