Additional Information
About Amendment 3
Additional Information
About Amendment 3
1. The proposed amendment shifts General Revenue funds received from the sales tax on motor vehicles to a STATE ROAD BOND FUND. The moneys in the state road bond fund are to be used exclusively to fund and repay bonds issued by the highways and transportation commission.
Elementary, secondary and higher education, social services, mental health - in fact, all departments that receive state General Revenue funds---will be adversely affected.
For FY05, General Revenue is expected to receive $125.6 million from the vehicle sales tax.
This proposal would phase in the shift of funds from General Revenue to the new state road bond fund over a 4 year period, beginning July 1, 2005 (the start of FY06).
At present, one-half of the state sales tax on motor vehicles goes to state General Revenue where it may be used for any purpose approved by elected legislators and the governor. The other one-half is dedicated for transportation purposes and is allocated in this way: 10% to counties; 15% to cities; 1% to the transportation fund (multimodal*); 74% to the state road fund. Under the proposed amendment, the state road fund's portion decreases 1% (to 73%) and the state transportation fund receives 1% more.
NOTE: Prior to a constitutional amendment of 1979, ALL of the sales tax on motor vehicles went to state General Revenue. The state constitution was amended in 1979 to add subsections 2 and 3 to Article IV, Section 30(b). At that point motor vehicle sales tax was split between General Revenue and highway funds.
*"Multimodal" includes aviation, rail, transit and water ports.
2. The proposed amendment reduces the funds the Department of Revenue may receive for collection of the various transportation-related taxes and fees, and eliminates funds for other departments and state offices.
The amount the Department of Revenue may receive is capped at actual costs, but not to exceed 3% of the particular tax collected.
State budget officials say this 3% limitation will not provide sufficient funds to cover Department of Revenue costs for collection of sales and use tax and motor vehicle and driver licensing fees. These funds pay for the department's highway-related operations.
Officials of the Department of Revenue are concerned about this loss of funds. The department will have to have more dollars from General Revenue, or cut back services. This cut back would probably mean some license offices would have to be closed. It could mean longer lines to get vehicle titles and driver's licenses, and longer travel times to get to a license office.
An estimated $41 million that is now appropriated for the Department of Revenue from the state highways and transportation department fund will no longer be available. If these funds are not replaced, the department will be unable to perform critical enforcement activities like revocation of driver licenses for DWI (Driving While Intoxicated) offenders. Failure to adequately enforce state DWI laws could jeopardize millions of dollars worth of federal highway funds the state would otherwise receive.
The proposed amendment requires that beginning in FY2006, funds from the state highways and transportation department fund will be permanently eliminated for the Department of Natural Resources, the State Auditor and State Treasurer.
Total Cost/Loss to State General Revenue: FY06---$73.2 million
FY07----$109 million
FY08----$146.9 million
FY09----$187 million (for this and succeeding years, and will increase with economic growth)
3. The proposed amendment provides that the revenues distributed to the state road fund, the state transportation fund, the state road bond fund, counties, cities, towns or villages shall not be considered an "expense of state government" or a part of the "total state revenue" for Hancock purposes.
This means that the proceeds of the gas tax, motor vehicle sales tax and license fees are not included when "total state revenue" is calculated for purposes of the Hancock limitation on state revenue.
4. Moneys deposited in the state road bond fund may only be used to fund the repayment of bonds issued by the highways and Transportation Commission to finance the construction and reconstruction of the state highway system, or to fund refunding bonds. The only exception is that after January 1, 2009, that portion of the moneys which is not needed to make payments on the bonds may be appropriated to the state road fund. The amendment clarifies that moneys deposited in the state road bond fund or state road fund shall not be used for multimodal purposes.
5. The proceeds from the sales tax on motor vehicles which are subject to allocation and deposit into the state road bond fund will not include the proceeds of the one-eighth cent conservation sales tax, the one-tenth cent sales tax for soil and water conservation and state parks, or the one cent sales tax for the school district trust fund.
6. The state constitution currently provides in Article IV, Section 30(b)1 for payment of the administrative costs of the highways and transportation commission and the department of transportation. These costs, as with those for refunds, collection and enforcement, are to be paid first. After making all such payments, the amount that remains is to be used for road and bridge construction and maintenance (primarily payments to contractors), which "stands appropriated without legislative action."
The amendment makes a fundamental change regarding funding for the Commission and Department of Transportation. Except for vehicle sales taxes that are distributed to cities, counties, and the state road bond fund, limited payments to the Department of Revenue, and funds for the state highway patrol in administering and enforcing any state motor vehicle laws and traffic regulations, all revenue from the gas tax, the vehicle sales tax, and license fees must be deposited in the state road fund. These funds stand appropriated without legislative action to be used and expended by the highways and transportation commission and department, for administrative purposes as well as road and bridge construction and maintenance.
This would permit MoDOT to withdraw funds from the state treasury without benefit of an appropriation. This contradicts other constitutional (Article IV, Section 28) and statutory (Section 33.170) provisions. Thus the proposed amendment could create a "super-department" -- one able to totally disregard the will of the people, governor and general assembly in regards to its budget and operations.
As such, MoDOT would be able to grant pay raises and provide other benefits not granted to other state employees at its sole discretion, as it would not be bound by appropriation bills for highway-related functions. That would be an unfortunate development for the state overall.
The state has attempted to move towards a uniform, comprehensive approach to matters of compensation so that individuals performing similar work in different agencies receive similar pay. The same can be said for benefits. Depending on MoDOT's actions (and those of the commission), this could have a sizable fiscal impact on highway funds (as well as compensation equity issues between departments).A second problem exists regarding how certain costs of the Highways and Transportation Commission are to be met. The proposed constitutional amendment deletes the present provision regarding the costs of the Highways and Transportation Commission (as well as Transportation Department costs). But unlike the case with the Department, nowhere in the remainder of the proposal are the Commission costs addressed through new language. So technically speaking, while the commission is to oversee the department and all its operations, nowhere are highway funds explicitly endorsed for payment of commission expenses.