MoDOT vote may cost other agencies

JEFFERSON CITY, Mo. -- If Missouri voters ratify Amendment 3 on Nov. 2, an estimated $160 million a year in existing revenue will eventually be redirected to the Missouri Department of Transportation. That money, however, will be pulled from the state's general fund, which is used to support most other state agencies, especially education and social services.

While supporters tout the proposal as a way to accelerate road and bridge construction without a tax increase, the newly formed campaign No on Amendment 3 says other important state programs will pay the price.

"The most appropriate name for this proposal is the Highway Robbery Amendment," said Pat Martin, a spokeswoman for the group.

The bulk of the funds Amendment 3 would provide for transportation would come by way of sales taxes on motor vehicles.

Until 1980, all motor vehicle sales tax proceeds were deposited into general revenue, the portion of the state budget over which lawmakers have the most discretion. In 1979, however, voters by a nearly 3-to-1 margin ratified a constitutional amendment that directed half of the motor vehicle sales taxes to transportation.

Amendment 3 would gradually shift the remaining portion of those sales-tax proceeds to transportation. Once fully implemented starting in July 2008, it would result in at least $130 million a year going to transportation instead of general revenue.

Missouri Chamber of Commerce and Industry spokesman Ray McCarty said natural growth in general revenue should be more than sufficient to recoup the lost sales tax proceeds. The chamber is the key backer of Amendment 3.

"Since it is phased in over four years and with the traditional growth in general revenue, it shouldn't affect any of those other state agencies and state services," McCarty said.

Over the past two decades, general revenue collections have increased by an average of $295 million a year, McCarty said. Collections did decrease by $108 million in fiscal year 2002 and another $145 million in FY 2003 before increasing by $334 million last year.

But even if growth more than offsets the redirected funds, passage of Amendment 3 would still result in less general revenue to go around than otherwise would be the case. That is of particular concern to the education community. For the current fiscal year, the departments of elementary and secondary education and higher education combined have been allocated 48 percent of the $7.13 billion general revenue budget.

Missouri National Education Association spokesman Otto Fajen said his organization will vote later this month to determine whether to formally oppose ratification. However, Fajen said many association members are troubled by the proposal.

"By pulling that money out of general revenue and pushing it into road construction, it puts a hole in general revenue that will have to be made up by a reduction in spending," Fajen said.

All proceeds from the remaining portion of the motor vehicle sales tax would be deposited in a newly created state road bond fund. That would allow MoDOT to borrow money to launch new construction projects and have a dedicated revenue stream for paying off the debt.

Four years ago, the Missouri Legislature authorized MoDOT to sell up to $2.25 billion in construction bonds, but so far only $907 million in bonds have been issued due to concerns that future MoDOT budgets would be consumed by debt repayment without additional money.

mpowers@semissourian.com

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