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MTD and AIM back transportation sales tax, Nixon doesn’t

The lines have been drawn in the sand on the transportation sales tax issue: The Missouri Transportation and Development Council (MTD) and Associated Industries of Missouri (AIM) support the funding mechanism for the future transportation needs of the state of Missouri. Governor Jay Nixon does not.

Last week, the Executive Committee of the Board of Directors of AIM voted to back the ballot issue that will go to a statewide vote in August. It would put in place a three-quarter of one percent sales and use tax for ten years. The sales tax would not apply to food. Proceeds from the tax would go to the Missouri Department of Transportation to fund road and other transportation projects.

MoDOT is facing a fiscal crisis due to several factors, including the depletion of proceeds from bonds used to monetize the transfer of money back to MoDOT that had been previously diverted to other state agencies prior to adoption of a constitutional amendment in 2004.  The diversion was corrected by voters and the proceeds of about $141 million per year were bonded to provide about $1.3 billion in construction moneys for road improvements.  That money is now depleted.

Also cramping transportation improvement resources is the fact that revenues are decreasing from the state motor fuel tax at the same time that federal highway tax dollars are shrinking and unreliable.

The new sales tax, if approved by voters, would provide about $538 million a year for transportation improvements. Each region of the state could see benefit from the added revenues. Regional planning organizations are submitting lists of needed projects to MoDOT now.

“Missouri needs to move forward, and it can’t move forward if its transportation system is broken,” said MTD spokesman and AIM president Ray McCarty. “The sales tax idea has been vetted by numerous groups through a series of hearings around the state as the most fair and workable solution to the transportation funding crisis. Transportation is vital to our existing Missouri businesses as well as to potential new Missouri employers.”

Governor Nixon, on record as supporting increasing revenues for transportation, surprised backers of the sales tax ballot issue by placing the issue on the August ballot, giving supporters less time to get their message out to voters. But on Monday, the governor issued a statement openly hostile to the resolution.

Calling the sales tax idea “neither a fair nor fiscally responsible solution” to the state’s transportation infrastructure’s needs, Nixon signaled he would not support the ballot measure. In his message, Nixon again cited his disdain for the legislature’s tax cuts for businesses and individuals.

“We want to focus on finding solutions to real problems that face Missourians, like funding transportation and ensuring we have a fair and competitive tax climate in Missouri, and we know many elected officials share that same focus,” said McCarty.

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