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Funding the Missouri Department of Transportation and the State Highway System

February 22, 2016
By Joseph Miller

Transportation is critical to the Missouri economy. Every day, millions of Missourians use the state’s roads, bridges, public transportation, airports, and rails to go about their daily lives.

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Transportation is critical to the Missouri economy. Every day, millions of Missourians use the state’s roads, bridges, public transportation, airports, and rails to go about their daily lives. According to the latest annual estimates, Missouri’s roads accommodated almost 69 billion vehicle miles, public transportation saw more than 68 million boardings, and almost 12 million passengers flew out of the state’s airports. Even for those who are not traveling, Missouri’s transportation system is integral to everyday life, transporting goods and services around the state. Over a billion tons of freight moved through Missouri in 2011, allowing more than a trillion dollars of goods to reach markets in Missouri, around the country, and across the globe.

While the importance of Missouri’s transportation system to the state’s economy and the lives of its residents is evident, perhaps the most critical element of that system, the state’s highway system, is in danger of falling into disrepair. The Missouri Department of Transportation (MoDOT), which is responsible for building and maintaining the state highways, claims that it may no longer have the funds necessary to maintain the state highway system in the near future. The main problem is that the user-fee funding base originally set up to fund highways has failed to keep pace with the increasing expenditures required to build and maintain the state’s most-trafficked roads and bridges. The largest portion of that funding base is the state’s 17 cent per gallon fuel tax, revenue from which has been in long-term decline, as drivers choose more fuel-efficient vehicles and economize on travel. Past attempts to raise additional revenue, through a statewide sales tax, fuel tax increases, and the introduction of tolling, have not succeeded to this point. However, if the state’s highways deteriorate, it could have a sizable negative effect on the economy and the daily lives of residents, both of which rely on state highways more than any other type of transportation infrastructure. Furthermore, many of Missouri’s most important highways are aging to the point where they will soon need to be replaced altogether. This nexus of immediate funding needs and multi-billion-dollar liabilities not far on the horizon make the creation of a coherent highway funding strategy more important still. As a road map to creating an effective and comprehensive funding solution, this paper will provide:

  1. An exploration of the priorities and responsibilities of the state’s transportation department, MoDOT. This will include a rough outline of the state highway system, and how MoDOT funds its maintenance and improvement. An explanation of the structure and funding of the state’s airport network will also be discussed as a counterexample to the state highway system.
  2. An explanation of how a declining userfunding base has led to a crisis in funding for MoDOT, and the state highway system in particular.
  3. An overview of possible approaches toward ending the funding crisis, including general taxation, fuel taxes, tolling, vehicle registration fees, and mileage based user fees. This section of the paper will also discuss the comparative merits of these approaches, in terms of revenue potential, economic effects, and taxation impact on Missourians.