DALLAS — An unanticipated $47 million increase in Missouri's road tax collections will provide the state with the matching funds it needs to obtain $167 million of federal transportation funding in fiscal 2017 that officials had feared would be lost.
Revenues from Missouri's fuel tax of 17 cents per gallon, vehicle sales taxes, and licensing fees were up 4.5% in fiscal 2015, part of the overall 8.8% increase in state general revenue, said Stephen Miller, chairman of the Missouri Highways and Transportation Commission.
"This [additional $47 million] was a little surprising because in the recent past, MoDOT's revenues have varied only slightly from projections, and some of those variances were negative rather than positive," Miller said. "This revenue increase means MoDOT should be able to make its federal match in 2017."
An earlier departmental financial report said the state would fall short in fiscal 2015 by $42 million of the revenues that would be needed to obtain the $167 million for fiscal 2017, he said.
Indications are that the 2015 collections are a one-time anomaly, Miller said. He warned that meeting the federal funding match in 2018 and beyond remains questionable.
"Simply scraping by and barely meeting federal funding matching does not address Missouri's long-range transportation needs," Miller said. "Missouri's transportation future is uncertain and will remain so until stable, reliable, long-term funding is put in place."
Missouri's highway funding system is broken, he said, noting that the state has the seventh-largest road system in the U.S. but is 46th in funding. "We are woefully underfunded," Miller said. "We continue to lurch from financial crisis to financial crisis."
Missouri voters in 2014 rejected a constitutional amendment that would have raised the state sales tax to provide $5 billion for transportation needs over 10 years.
The Missouri highway commission recently approved a construction and funding plan that reflects the expectation of a drop in funding to $325 million in 2017 from $700 million in fiscal 2015. The plan calls for the commission to focus its resources on only about 8,000 miles of Missouri's 34,000-mile state highway system to keep the targeted roads in good condition. The remainder will receive limited routine maintenance.
Meanwhile in Missouri's neighbor to the south, a 20-member commission appointed by Arkansas Gov. Asa Hutchinson is looking at ways to reduce the gap between the $3.6 billion of state and federal highway funding anticipated over the next 10 years and the $20.4 billion of identified needs.
Hutchinson said the Working Group on Highway Funding must "balance everyone's desire to have a more efficient revenue stream with political reality." The governor said new solutions are needed because gasoline tax collections are declining as vehicles become more fuel efficient.
The panel's recommendations are due Dec. 15.
Hutchinson agreed to create the highway panel in April after a legislator pulled a bill that would have transferred general revenues to the state highway fund.
Scott Bennett, director of the Arkansas Highway and Transportation Department, said the gasoline taxes may no longer be a sustainable revenue source. Arkansas has not increased its fuel tax since 2001.
"Consumption is down, and when that decline happens, that means the revenue is declining," he said.
The state tax of 21.5 cents per gallon of gasoline and 22.5 cents of diesel brought in $455.8 million in fiscal 2005 but collections fell to $435.7 million in fiscal 2014, according to the Arkansas Department of Finance and Administration.
The state is considering other revenue options, including converting Interstate 40 between Little Rock and Memphis, Tenn., to a toll road, Bennett said.