Local Gas Taxes Are the Secret Garden of City Road Funding Options
A version of this commentary appeared in the Columbia Tribune.
When troubled or sickly aristocratic English youth needed a place to recuperate in private away from their cruel stepparents, they would go to Secret Gardens, where magic and mystery would solve all of their problems. We don’t need mysterious places to address our transportation needs in Missouri, and most of our “Secret Gardens” are actually illegal meth labs. But, amazing as it may seem, there really is a local transportation funding option that is unknown to most municipal officials in Missouri. Local gas taxes are a little-used yet very efficient method of funding important local transportation priorities for cities like Lake Ozark as it considers ways to improve Bagnell Dam Boulevard and Valley Road.
I know what you’re thinking. If there is tax that most politicians don’t know about, why would you tell them? Our gas taxes are low in Missouri, and Missouri voters clearly like them that way, as attempts to raise our second-lowest-in-the-nation rate have consistently failed at the polls.
That low tax rate has benefits and costs. If you stop at a gas station near the state border, you can’t help but notice the large percentage of license plates from border states gassing up over here in Missouri. Those drivers do much of their driving in other states but choose to give us their tax dollars for Missouri roads.
But the low gas tax has costs, too. Missouri’s roads and bridges could certainly be in better shape. A 2019 report from the Federal Highway Administration ranked our roads as 8th worst in the nation. We don’t want to commit the logical fallacy of drawing causation from correlation, but there might be a connection between those 2nd-lowest taxes and those 8th-worst roads. Even for roads in good condition, increases in population, tourism, and more can burden a system.
The fact is, we need to invest more in our road and bridge system in Missouri, and our local roads are no exception. Local roads are maintained by cities and counties, not the state, and are funded by a mixture of the state gas tax, local property taxes, and sales taxes. Unfortunately, local sales taxes are the mechanism most frequently expanded to fund local roads, and they are the worst option of the three. Funding roads by sales taxes subsidizes the act of driving by charging shoppers in a manner unconnected to driving. Walkers, bikers, or carpoolers will pay just as much as solo drivers for road improvements. People who can drive on roads without directly paying for their upkeep will drive more than they otherwise would, with the resulting extra traffic, pollution, and other road issues.
Ideally, the cost of driving should be connected as closely as possible to the act of driving. Lake Ozark city leaders are currently considering a sales tax-based transportation development district (TDD) to fund improvements to Bagnell Dam Boulevard and Valley Road, both key roads for the region. A better option for funding local roads like these would be a local gas tax. A local gas tax fixes the discrepancies that sales tax funding methods generate and, more importantly, can raise substantial money for road improvements.
Seven cities in Missouri have adopted local gas taxes. By law, the money raised from these taxes can only be spent on roads within those communities. All of the local gas taxes enacted have been very low—none higher than two cents per gallon. Even at that low level, they can raise significant money, but none of these seven cities have the combination of local population and tourism that Lake Ozark has. With those tourists, a local fuel tax of just two cents per gallon could potentially bring over one hundred thousand dollars per year on top of the existing road revenue sources. That money would fund a substantial amount of road improvements for Lake Ozark, all while properly maintaining the connection between the act and cost of driving. Or, if Camden and Miller county leaders have similar concerns, countywide gas taxes could be implemented that would raise even more money.
Lake Ozark is the heart of an area vital to our state. The residents who live there and the tourists who visit need and deserve quality roads. A local gas tax would be an efficient and beneficial way to fund road maintenance and improvement. Community leaders and residents should strongly consider passing one this year. Lake Ozark does not need a hidden code or a secret garden to deal with its transportation issues, just community support to address these key improvement needs.