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AIM and MTD testify against repeal of fuel tax increase

February 8, 2022- This afternoon, Associated Industries of Missouri (AIM) and the Missouri Transportation and Development Council (MTD) testified against House Bill 1594, a bill filed by Rep. Sara Walsh that would repeal the previously passed motor fuel tax increases in Missouri.

Rep. Walsh and several members of the committee said the motor fuel tax increase was no longer needed due to the abundance of federal money available to the state for infrastructure.

The additional tax on motor fuel began with 2.5 cents in October 2021, and will increase by 2.5 cents in each fiscal year until reaching an additional 12.5 cents per gallon on July 1, 2025. This bill repeals these motor fuel tax increases along with the rebate that is currently allowed for those increases.

Most of the questioning of the House Special Committee on Government Oversight was addressed to the Missouri Department of Transportation and the Missouri Highway Commission, both of which appeared before the committee in opposition of the bill. Many members of the committee questioned MoDOT regarding a pending lawsuit filed against the state questioning the ability of MoDOT to use highway funds without a state appropriation, and a plan by the Highway Commission to increase salaries in an effort to stem widespread turnover at MoDOT among the rank and file.

At one point in the questioning, Rep. J. Eggleston asked MoDOT Director Patrick McKenna about McKenna's salary that had increased 30% over the last several years. McKenna responded that increase was planned when he took the job at MoDOT.

While our first instinct is to work AGAINST tax increases, we wholeheartedly supported increasing the fuel tax to provide funding for transportation improvements and still support additional funding for transportation improvements. Why? We recognize the value provided to Missouri businesses from having a transportation system that is in good repair minimizes congestion and related downtime, and allows us to efficiently and safely move products and people on Missouri roads.

In encouraging businesses not to seek refunds of the tax, we asked businesses to consider the following:

  • Congestion means costly delays: One major Missouri manufacturer estimates each hour of delay in delivery of raw materials costs them $1 million. In today's just-in-time manufacturing environment, any delay can cost your operation dearly. When your employees or customers are tied up in traffic your business may miss opportunities or lose productivity. St. Louis, MO I-64/I-55 at I-44 is the 8th worst truck bottleneck in the nation, according to the American Transportation Research Institute.

  • Safety: Safety of your employees and customers traveling to and from your business is important to every business. Of course, the value cannot be estimated in dollars and cents.

  • Missouri Interstate bridge conditions: Of the 1,381 bridges on Missouri's Interstate system, five percent are considered in poor or structurally deficient condition making Missouri the tenth highest rate in the nation for poor bridges.

  • Vehicle repairs: Poor road conditions cost vehicle operators in front end alignments and other maintenance and repair costs.

The committee took no action during the four-hour long hearing.



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