Governor Parson Signs Off On Missouri's First Gas Tax Hike In More Than Two Decades
The tax increase is expected to generate nearly $500 million annually for the state’s roads and bridges.
Missouri drivers can expect to pay more for gas this fall after Gov. Mike Parson signed the state’s first fuel tax raise in decades into law today.
The measure will gradually raise the state’s 17-cents-per-gallon gas tax by 12.5 cents over the next five years. The tax will go up 2.5 cents a year starting this October.
Parson joined state legislators in Kansas City on Tuesday for a ceremonial signing of the bill. He said the tax hike will move infrastructure forward across the state.
“It's a big win for the state. And really, for the future of our state,” Parson said. “It’s 25 years in the making, trying to get this done.”
The gas tax hike is expected to generate $460 million annually for the state’s roads and bridges.
Parson signed the bill in a ceremony at the site of the new Buck O'Neill Bridge, which started construction last month. Kansas City and Missouri are splitting the cost of the $220 million project, even though the state owns the bridge.
"When you look at things like the Buck O'Neil Bridge, the I-270, one of the largest projects in our state's history in St. Louis, the Rocheport Bridge, all of that connects the state of Missouri, all those three major projects, along with all the other things we're going to be able to do," Parson said.
Missouri's fuel tax was last raised in 1996 when the state’s legislature passed a 6-cents-per-gallon hike. A 10-cent increase was turned down by voters in 2018 by nearly 54%.
The state has the second lowest gas tax in the nation, according to the Tax Foundation.
Missouri Department of Transportation Director Patrick McKenna said the tax revenue has not kept up with inflation, causing Missouri’s infrastructure to lag behind.
“That's had Missouri get behind where we want to be in infrastructure and in the investment that spurs the economic growth, improves the safety and the well being and the quality of life for every Missourian,” McKenna said.
The gas tax hike would cost the average driver about $6 a month or $70 a year. Larger vehicle owners would pay around $100 more a year.
The law differs from previous bills by giving drivers the option to get a 100% rebate of the new tax if they keep record of their sales receipts. The move is modeled after South Carolina’s process.
Missouri House Rep. Becky Ruth, chair of the Transportation Committee, praised the bipartisan support behind the bill.
“It's a great balance for those that want to leave their money invested into our infrastructure and our roads and bridges, or those that really feel like they need to get those taxes back for whatever reason that might be,” Ruth said.
Based on similar rollout in other states, Parson said he anticipates a “minority of people” to take advantage of the rebate system.
Besides the gas tax, the law increased the state’s electric vehicle decal fee by 20% annually for five years and the establishment of an Electric Vehicle Task Force under the Department of Revenue.