Jan 15, 2015 – Weekly Capitol Update

MoDOT SAYS IT WON’T HAVE ENOUGH MONEY FOR ALL ROADS

Missouri Department of Transportation officials say that starting in 2017 road construction funding will drop to about $325 million a year, substantially less than the $485 million annually required just to maintain the 34,000-mile state highway system.

As a result, MoDOT plans focus its remaining financial resources on roughly one-fourth of the system, with the rest receiving such minimal attention that officials acknowledge those roadways will deteriorate.

MoDOT Director Dave Nichols presented the austerity plan, dubbed Missouri’s 325 System, to the Missouri Highway’s and Transportation Commission on Jan. 14. Under the plan, MoDOT will continue to fully maintain 8,000 miles of “primary” roads, including interstates and U.S. highways that connect Missouri cities. As to the remaining 26,000 miles in “supplementary” roads mostly used for local travel, work will be limited to filling potholes and plowing snow but little else.

“We won’t be able to provide the same level of service as we have in the past,” Nichols said in a news release. “This is not a course of action we want to take, but it’s one that insufficient funding forces us to take.”

In a report outlining its planned cutbacks, MoDOT said its financial problems are largely due declining revenue from state and federal fuel taxes, increased costs for construction materials and inflationary pressures. Barely mentioned, however, is that during the last decade MoDOT pushed for the legal authority sell billions of dollars in bonds to fund a short-term construction boom. As a result, MoDOT is now spending roughly $250 million a year to pay off the debt, which won’t be retired until 2029.

Missouri voters in August rejected a proposed ¾-cent transportation sales tax that would have generated an estimated $534 million a year for transportation project. The measure, Amendment 7, received just 40.8 percent of the vote. With the failure of Amendment 7, there has been little enthusiasm in the General Assembly for putting another transportation tax proposal before voters.

 

PROPOSAL FOR NEW STL FOOTBALL STADIUM ANNOUNCED

The team appointed by Gov. Jay Nixon to develop a plan for keeping the St. Louis Rams from relocating back to Los Angeles announced a tentative proposal on Jan. 9 to build a 64,000-seat riverfront stadium that would cost between $860 million to $985 million. The plan calls for Rams owner Stan Kroenke and the National Football League to pay roughly half the cost, with state and local taxpayers paying the other half.

There appears to be little enthusiasm for the project, however. Days before the St. Louis plan was unveiled, Kroenke announced his intention to build a new 80,000-seat football stadium in the Los Angeles suburb of Inglewood. The Rams played in the Los Angeles area from 1946 until moving to St. Louis in 1995.

Missouri legislative leaders have said there likely isn’t much support for using public money to build a new stadium to replace the Edward Jones Dome, which is just 20 years old. State and local taxpayers are still paying a combined $24 million a year to pay off the bonds used to finance the Dome, which won’t be retired until the early 2020s.

 

SUPREME COURT REJECTS TAX BREAKS FOR CONSTRUCTION

In a trio of separate rulings, the Missouri Supreme Court on Jan. 13 rejected efforts by businesses to claim sales tax exemptions on equipment and materials used in construction. In each of the cases, the unanimous court said the sales tax exemption law in question applies only to manufacturing, not construction.

An official with the Missouri Chamber of Commerce and Industry told The Associated Press that the group will lobby the Republican-controlled General Assembly for legislation specifically applying the sales tax exemption to materials and equipment. Such legislation would effectively overrule the court’s decisions, if enacted.

The cases are Ben Hur Steel Worx v. Director of Revenue, Fred Weber Inc. v. Director of Revenue and Alberici Constructors Inc. v. Director of Revenue.

 

CIVIL WAR SESQUICENTENNIAL: MISSOURI ENDS SLAVERY

A special state convention voted 60-4 to immediately abolish slavery in Missouri 150 years ago on Jan. 11, 1865. The fate of slavery was placed in the hands of the state convention after the Missouri General Assembly proved unable to resolve with the issue.

While willing to grant slaves their freedom, however, convention delegates refused to give them equal legal rights on a vote of 38-25. Delegates also voted 58-4 against granting freedmen the right to vote.

Missouri’s abolition of slavery came nearly year before the 13th Amendment to U.S. Constitution was ratified in December 1865, finally ending slavery throughout the country.