CHCAGO - Missouri transportation officials blamed a lack of consensus on how to pay for the state's transportation needs for the failure of a ballot measure that sought a sales tax hike to generate more than $5 billion in new revenue.
Voters rejected the pleas of state transportation officials who stressed the need for more funding to keep the state's roads and bridges safe and ensure the state has the money needed to secure federal matching funds.
About 59% of voters rejected the statewide three-fourths of a cent sales tax hike. It would have generated more than $500 million annually for transportation projects over its 10-year life.
"As we have seen for the past several years, I think Missourians have a clear understanding that more resources need to be invested in our transportation infrastructure, but there just isn't any consensus on how to pay for it," Stephen Miller, chairman of the Missouri Highways and Transportation Commission said in a statement. "We need to continue working toward that end."
The commission, which oversees the state transportation department and serves as a bond issuer, has exhausted its borrowing capacity based on its current state and federal revenue streams and has shifted its focus to maintenance.
"We will continue our focus on safety, maintaining our roads and bridges, and providing outstanding customer service with the resources we have," Missouri Department of Transportation director Dave Nichols said in a statement.
State transportation officials have pressed in recent years for more funding and lawmakers during their 2014 session finally signed off on asking voters to approve a constitutional amendment raising the sales tax. The measure was known as Amendment 7.
Gov. Jay Nixon decided to place the measure on the primary ballot, surprising supporters who hoped it would appear on the November general election ballot. Nixon then announced his opposition.
The burden of the tax increase "would fall disproportionately on Missouri's working families and seniors," Nixon said. "This tax hike is neither a fair nor fiscally responsible solution to our transportation infrastructure needs and it does not have my support."
Support among various tax and transportation groups was mixed. Opponents wanted a higher funding burden placed on trucks and more funds directed to public transit.
The sales tax hike would have taken effect on Jan. 1, 2015. Funding would have gone to road, bridge, railroad, port, airport and other transportation projects. It would remain in place for 10 years and could be extended with another vote. The proposal earmarked 90% of the new revenue for state projects and 10% for local ones.
The sales tax would have expanded the current revenue sources now used to fund transportation projects. The state's road bonds are secured by the department's primary sources of revenues including state motor fuel taxes, sales taxes on motor vehicles, and motor license fees.
Given declining gas tax receipts, officials have warned the state could soon have trouble covering road maintenance needs and by 2020 would face a hard time matching federal funds.
The commission earlier this year refunded about $900 million of its bonds to save on interest costs restructured some debt, accelerating debt service to open up new borrowing capacity.
Ahead of the sale, all three rating agencies affirmed triple-A ratings for the first lien bonds and Standard & Poor's affirmed the AAA rating it also applies to the second lien bonds. Fitch Ratings affirmed its AA-plus rating on the second lien bonds and Moody's Investors Service affirmed its Aa1 rating.
The commission has a total of $2.8 billion of outstanding debt including all of its state road bonds under various liens and its bonds that leverage federal grants.