Considering the ROI for the Missouri Highway System

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The Missouri Legislature is considering putting a measure on the ballot to raise the state sales tax by 1% (from 4.225% to 5.225%) to fund transportation. It’s likely to make it on the ballot, with even St. Louis city senator Joe Keaveny (D) saying he will vote for it. Before we rush to the polls this fall, let’s take stock on how our current system is performing.

MO VMTMissouri Gross State Product (GSP) is up 8.3% 2000-12, while it is up 23% in the entire country. Clearly the new and expanded roads built in the 90s and 00s aren’t helping us out-perform the rest of the country.

MO GSPVehicle miles traveled on Missouri state highways is flat 2000-2012. So there’s little demand for more.

Next compare Missouri GSP per Vehicle mile traveled. This is up 7.1% 2000-12. We are getting more out of the traveling we do. The economy is changing.

Farmington Flyover
{Flyover ramp near Farmington, MO. Has this made Farmington or St. Francois County wealthier or just saddled it with a liability?}

USDOT VMT Projections vs Reality
{USDOT compilation of VMT projections from state DOTs vs Reality}
State DOTs are living in the past. If one went to prospective investors and presented these projections for market growth vs reality you’d be laughed out of the office.

So will doubling down on state highways make us wealthier? Is giving $8B over the next ten years to the state for this one purpose worth the opportunity cost?

MoDOT – Missouri on the Move, Final Draft Full Tech Report 11-5-13 by nextSTL.com

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  • John R

    It will be interesting to see how much of a bone they throw to non-highway modes. If they propose giving say $100 million+ off the top for the Missouri River Runner as a statewide priority, substantial commitments to the urban transit authorities, and meaningful support for bike/ped projects, etc. EWG equally commits to non-highway projects then I would consider supporting the initiative. We’ll see how serious they are in their support for building a true transportation system.

  • Brian

    It is crazy to increase the general sales tax to fund highways; place the burden on users by increasing the gasoline tax. Missouri’s gas tax is 5th lowest in the nation, 22.5 cents a gallon lower than Illinois The state could increase the tax by 20 cents a gallon overnight and no one would notice; when BP does it, no one raises a question. Over 3 billion gallons of gas are sold in Missouri each year. A 20 cent tax would raise $600 million a year To offset the fact that cars are using less petrol and electric cars use none, also impose a $100/yr tax on petroleum-powered vehicles and a $400/yr vehicle on electric and propane powered vehicles. There are 5.7 million vehicles in Missouri, almost all of which are petro-powered. A $100/yr tax would raise nearly $600 million a year. The concrete lobby and MoDOT can then pave to their hearts content and make I-70 six lanes from the Mississippi River in St. Louis to the Missouri River in KC with $1.1 billion in new revenue annually. The convenience store & gas station lobby is what is keeping us from raining the gas tax. They fear they will sell fewer high margin items like Slim Jims, Bladder Busters and corn dogs if people have to pay more for gas.

    • rgbose

      Had the 17 cent gas tax established in 1996 been indexed with inflation it would be 25 cents. I think we could have handled 1/2 cent per year if not more.

      • John R

        The horror! Personally, I would be a lot more comfortable if it were a mix… raise the gas tax a bit for highway projects (and maybe a toll for I-70) and raise the sales tax for transit and other non-highway. Another problem with raising the state sales tax such a high amount as proposed is that this form of taxation is relied on more by local governments for their own improvements. This would make it harder for local governments to pursue their own needs in the future.

  • moe

    We are getting more out of the travelling we are doing….totally agree, along with a minute uptick in public transportation as well as bikes, etc. This will put more wear on the roads we have shortening their lifespan. The problem with general taxes are that if I buy a book, what does that have to do directly with roads? Dedicated fuel tax would be the answer, as well as licensing of bikes (and learning the rules of the road would help too). Especially with the Complete Streets program being implemented. What’s wrong with asking those that use the roads to help pay for their build and maint.?

    • rgbose

      Indeed. Though while I don’t carry the flag for the bikers, I point out that they (everyone really) do contribute through property and earnings taxes, which primarily fund non-state streets.

    • KillMoto

      “What’s wrong with asking those that use the roads to help pay for their build and maine.?”

      As soon as drivers pay the same proportion per dollar damage they do to roads as cyclists, I’m in. Until then, you have some reading to do.
      http://grist.org/article/2010-09-27-why-an-additional-road-tax-for-bicyclists-would-be-unfair/

      • Adam

        that was a good read. thanks for posting.

  • kuan

    Note: The VMT and GSP graphs are flipped.

  • dempster holland

    Any new tax should be the an increase in the graduated income tax for those
    making over $75,000. Raising the gasoline tax or sales tax is regressive, and it
    is pure propaganda that a gasoline tax is only paid by the “users” of roads–in
    fact, everyone uses the roads. No, the only fair way is to tax the rich more–they
    are the only people that have gained much in the last thirty years, and it is
    time we quit coddling them. I would make the rate 7 per cent over 75,000 and
    8 per cent over 200,000.