Proposed bill would pause Missouri gas tax for six months beginning this summer

The bill is facing opposition from the Missouri Department of Transportation, which said it could lose out on hundreds of millions of federal dollars as a result of the tax holiday.
A proposed bill in the Missouri House could give drivers a break at the pump later this year.
Published: Mar. 22, 2022 at 5:50 PM CDT
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ST. LOUIS, Mo. (KMOV) -A proposed bill in the Missouri House could give drivers a break at the pump later this year.

House Bill 2801, introduced by Rep. Adam Schwadron (R-106), aims to stop the collection of the motor fuel tax from July 1, 2022 through December 31, 2022. If passed, it would result in a loss of $453 million in state revenue.

The revenue generated from the gas tax is split between cities, counties and the State Road Fund. The State Road Fund receives about 73 percent of the revenue, while the remaining 27 percent is split between cities and counties.

According to a Missouri Department of Transportation (MoDOT) spokesperson, the agency uses the money from the State Road Fund to match federal dollars in current and planned construction projects. Further, the impact on matching federal funds could average three to four times the amount of revenue lost, totaling between $978 million to $1.3 billion.

On Tuesday, a House committee heard public comment related to the bill as well as from the bill sponsors.

“It’s potential this could have an impact of $3 billion toward the projects and what that would require is taking projects out of the capital plan,” Eric Shrader, Assistant Chief Engineer for MoDOT, testified.

If passed, Shrader said the FY 2023-2027 Statewide Transportation Improvement Program could be reduced by as much as $3 billion, which would limit projects across the entire state.

Rep. Chad Perkins, (R-District 40), a co-sponsor of the bill, said the state is flush with cash between federal pandemic relief money and a $2.9 billion general revenue fund and could backfill the loss of revenue.

“We can plug some holes with general revenue, we can plug some holes with having a plan going forward that maybe isn’t as aggressive right now so that everyday Missourians can have some relief,” he said.

The committee also heard from representatives of the Missouri Asphalt Association and the Missouri Limestone Producers Association, who voiced concerns over the impact to their bottom lines if MoDOT is unable to complete current or future projects.

Rep. Dottie Bailey, (R-District 110), a co-sponsor of the bill and a sitting member of the House’s Special Committee on Government Oversight, said her concern is with her constituents.

“So many times I hear this industry is going to suffer, this company is going to suffer, because they’re not getting government dollars,” she said. “Government dollars are people money, that’s our money. Doing this small thing for six months is not going to put any company out of business, it’s not going put the concrete manufactures out of business, it’s not going to put the limestone folks out of business but who it is going to put out of business is my constituents and basically that’s everyone in the country right now because everyone is suffering.”

The proposal also states the state would save around $7 million in gas tax refunds that would not need to be issued in that six month period. However, refunds that need paid from outside of that six-month time frame would still be processed. MODOT said if the bill passes, it will likely need alternative funding to help pay for the refunds. If it is unable to process refunds within the 45 days required by state law, the department would have to begin paying interest, causing a significant increase in cost to the state.