Bills would pause Missouri’s fuel tax for six months

(The Center Square) – Two identical bills would give Missourians a one-time, six-month motor fuel tax holiday, but an exemption of the state’s sales tax also was mentioned during a hearing on Tuesday.

Rep. Adam Schwadron, R-St. Charles and sponsor of House Bill 2801, and Rep. Travis Fitzwater, R-Holts Summit and sponsor of House Bill 2813, testified their bills would allow Missourians to keep dollars as they face high fuel costs and the highest inflation rate – 7.9% in February – since 1982. AAA reported the average price per gallon was $3.765 in Missouri. After hitting a record $4.33 per gallon on March 11, AAA reported on Tuesday the national average for a gallon fell to $4.25, 72 cents higher than last month and $1.37 more than last year.

Missouri’s current gas tax is 19.5 cents per gallon, and it will increase by 2.5 cents on July 1. Senate Bill 262, signed into law by Republican Governor Mike Parson last year, increased the gas tax by 73% to 29 cents per gallon by 2025.

“The intent is really important and that’s to give some Missourians relief,” Fitzwater said. “We’re trying to figure out a path for that. I’d be willing to look at any type of tax cut for everyday Missourians.”

The gas tax is expected to generate approximately $500 million in additional revenue for the Missouri Department of Transportation (MODOT) to improve roads and bridges. MODOT estimates it needs $745 million to complete all necessary projects.

Eric Schroeter, assistant chief engineer for MODOT, testified the estimated loss of $318 million for the six months is underestimated as the agency receives three or four matching federal dollars for transportation projects.

“It could be $978 million to $1.3 billion dollars lost for doing projects,” Schroeter said. “We have a planned bond issuance of $500 million, which would be used to match approximately $1.5 to $2 billion in federal funds. So uncertainty in revenue or a reduction doesn’t make bond issuance attractive or likely. This could have an impact of over $3 billion towards projects.”

Fitzwater stated Missouri’s record levels in general revenue and additional new federal transportation funding would allow the state to develop a plan to “plug some holes.”

Rep. Wes Rogers, D-Kansas City, told the committee that Maryland and Georgia recently passed gasoline tax holidays, and it’s being considered in Illinois, Massachusetts, Maine, Michigan, Minnesota, New York and Tennessee. He suggested a sales tax exemption would help more taxpayers.

“It’a noble goal when you know inflation is out of hand and normal people are trying to get by,” Rogers said. “If I was in the majority party and I was trying to do something to offer relief, I would look at a sales tax holiday. I think that would more directly impact people who need it the most.”

House Bill 1594, sponsored by Rep. Sara Walsh, R-Ashland, would repeal the gasoline tax passed last year. The bill was voted out of the Special Committee on Government Oversight 8-2 on Feb. 16, passed in the Administrative Oversight Committee 6-5 on Feb. 25, and was placed on an informal perfection calendar on March 1.

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