Increasing State Gas Taxes Insufficient To Meet Road Projects' Costs

Transportation funding is in a state of crisis. Schmitt had covered Missouri's massive layoffs in June ("Missouri, Welcome to the Era of the Broke State DOT"), and the recent report on the need to raise state gas taxes ("States Forfeit $10 Billion Annually Thanks to Outdated Gas Taxes"). However, in this article she questions the value of even significantly raising state gas taxes if they are going to fund expensive, highway-widening projects.

"So to pay for this project which is projected to cost anywhere from $1.5 billion to $4 billion, MoDOT has been exploring the idea of doubling the state gas tax over ten years... But for Missouri, it's not going to make expensive highway boondoggles suddenly become affordable, explains Network blog Gateway Street."

From Gateway Streets: MoDOT Proposed Gas Tax Increase Falls Well Short of Funding New I-70, Future Projects: "So MoDOT recently came forward with some ideas on how it might pay...to rebuild and widen I-70 between Kansas City and St. Louis. The two options they proposed included 1) a 15¢ increase in the state gas tax over ten years, 2) tolling I-70, or both.

Inflation and rising CAFE standards mean that there is a finite amount of money MoDOT can hope to raise from a one-time increase in the gas tax above and beyond the revenue it currently earns....But, without additional sources of funding such as tolling revenue (or another major gas tax increase), MoDOT will be unable to invest in any other major projects for a long time to come."

Schmitt's conclusion: "We just can't afford to keep building highways where motorists drive for free. Maybe the right move for Missouri is to raise the gas tax and forget about this project."