Off the Editor’s Spike: Getting 2-cents worth

A proposal to raise Missouri’s fuel tax has been introduced to the State Senate — this time with a twist: an option for a rebate. Taxpayers would be able to choose if they want the tax money back or to leave it with MoDOT.

Sen. Dave Schatz, R-Sullivan, who sponsors the proposal, should get kudos for being willing to try something different. The idea, however, isn’t original. In South Carolina, people can apply for a tax rebate that refunds the money paid for the increase amount. Schatz is proposing that the tax increase by 2 cents each year until 2026.

My experience with rebates is checkered, even when the rebate impacts a decision to buy a product. I always intend to collect my rebate; I seldom do – which is, perhaps, the strategy to raise taxes for roads without saying taxes absolutely increase. It leaves that decision up to individual taxpayers.

According to Sen. Schatz, about 15% of those eligible asked for a rebate in South Carolina. In 2020, South Carolina reimbursed about $3.4 million to drivers, while the department of transportation pocketed $502 million, according to a government report. Getting the rebate in South Carolina requires saving receipts from gasoline purchases.

This idea is about how to collect a tax, how to get a tax increase passed. Surely there is less debate over whether MoDOT is underfunded. Missouri is ranked 48th in the nation for revenue-per-mile from the tax, but has the seventh largest highway network.

A couple of years ago, over a million Missourians voted for an increase in road funding … although, typically, voters here question whether MoDOT efficiently uses the funds it has and also whether a tax voted for roads and bridges only finances roads and bridges. So, previous attempts to raise the fuel tax were shot down by Missouri voters.

As my initial take, or for my 2-cents worth of thought, tax rebates seem like an unseemly gimmick. Four bills were introduced in the last session to raise the tax, which is currently 17 cents per gallon, but none were successful. Nobody wants to pay more tax. But obviously, we cannot maintain our road system, one of the largest systems in the United States, being ranked 48th in funding.

Stay tuned. These are interesting times.