Missouri governor signs transportation funding law that includes gas tax hike

July 14, 2021

A 2.5-cent-per-gallon annual fuel tax increase over five years will begin in 2021

Gov. Mike Parson this week signed new legislation into law to increase transportation funding for state and local infrastructure projects across Missouri.

The legislation includes a 2.5-cent-per-gallon annual fuel tax increase over five years beginning in 2021. The current state gas tax is 17 cents per gallon and the increase is slated to take effect in October, according to the St. Louis Post-Dispatch.

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

Missouri has the seventh largest transportation system in the nation but only ranks 45th in available revenue per road mile, the Governor's office says. 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. 

SB 262 could increase transportation funding by more than $450 million once its provisions are fully implemented. An estimated $330 million per year would be available for the State Road Fund administered by the Missouri Department of Transportation, and nearly $125 million—approximately 30% of total revenue—would go directly to cities and counties for local transportation projects. 

All revenue that SB 262 will generate is required to be used to maintain roads, bridges, and the overall transportation system. MoDOT will use these funds to help cover the more than $8.25 billion funding gap for high priority annual transportation needs that have been identified over the next 10 years, the Governor's office says.


SOURCE: Office of Gov. Mike Parson | St. Louis Post-Dispatch