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Transportation funding bill signed by Governor Mike Parson


July 13, 2021 - Following years of work by the Missouri Transportation and Development Council (MTD), Associated Industries of Missouri (AIM), and other transportation advocates, hours of debate by the Missouri House of Representatives and Missouri Senate, and repeated failed referendums and other legislative attempts to provide additional transportation funding, Governor Mike Parson today signed SB 262 into law. The bill was sponsored by Senate President Pro Tem Dave Schatz and handled in the House by Representative Becky Ruth. Representative Ruth also serves as Chairwoman of the House Transportation Committee and Chairwoman of the Joint Committee on Transportation Oversight.


"With nearly $1 billion in unfunded transportation needs each year, we can no longer wait for another day or another generation," said Governor Parson. "We must change course and address these problems head-on. 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."


"On behalf of MTD, we would like to say congratulations and thank you to Governor Parson and the 2021 Missouri Legislature," said Rod Reid, Chairman of the Board of Missouri Transportation and Development Council. "The decision to put together an equitable funding measure will be looked back on by our children and grandchildren as a move to ensure the economic prosperity of Missouri," he said.


"AIM applauds Governor Parson's signature of the bill and thanks Sen. Dave Schatz and Rep. Becky Ruth for their persistent and strong support for this badly needed transportation funding increase that is so important for the safe and efficient transportation system all Missouri businesses need," said Ray McCarty, president and CEO of Associated Industries of Missouri. "We have worked for many years to get a bill through the General Assembly and we are pleased Governor Parson signed the bill today," he said.


The bill will increase motor fuel taxes by 2.5 cents per year for 5 years (totaling 12.5 cents per gallon when fully phased in). The first fuel tax increase will start October 1, 2021. The second and subsequent increases will occur on July 1 of each year beginning July 1, 2022. The bill will also double some alternative fuel vehicle registration fees over five years, and increase larger alternative fuel vehicle fees by 50% over five years. Along with phasing in an increase on alternative-fuel vehicles, the bill will provide more than $500 million in transportation funding before refunds.


The bill would allow motor fuel purchasers, including businesses, to retain their receipts and obtain a refund if they desire, very similar to the current process for obtaining refunds for taxes paid on fuel used in boats and off-road vehicles. The refund would not apply to vehicles with a gross vehicle weight of more than 26,000 lbs.


Missouri has the seventh largest transportation system in the nation but only ranks 45th in available revenue per road mile. Over the last 25 years, the state has not significantly increased funding streams for state or local transportation projects, while the cost to maintain Missouri roadways has continued to increase significantly.


"Whether rural, suburban, or urban, all Missourians benefit from better roadways," Governor Parson said. "SB 262 is an investment in our state that will benefit Missourians for generations to come, and we thank Lt. Governor Kehoe, Senator Schatz, and Representative Ruth for getting this legislation passed and helping move Missouri forward."


To view the bill summary, click HERE. For full bill details, click HERE.


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