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Legislator Fears Highway Bonds Will Lead to Tax Hike

November 8, 1995
By: ELIZABETH MCKINLEY
State Capital Bureau

JEFFERSON CITY - Legislators reviewing the Missouri's highway agency are raising questions about the department's idea of borrowing $500 million to accelerate construction.

The Missouri Highways Department is looking to get the legislature's approval to borrow $500 million in bonds.

The bond would allow the department to get back on schedule for it's 15- year construction program, said Joe Mickes, chief engineer of the department.

Payment on the bonds would come from the gas taxes and other road related taxes, said Patrick Born, a financial adviser to the department.

But, the chairman of an interim House Committee reviewing the Highways Department warns the bond-issue idea would lead to a tax increase in the next three years.

"I've heard speculation from more than one that there will be another gas tax," said Rep. Joan Bray, D-St. Louis County.

Bray said that the bonds would allow a higher level of construction for a only a limited time period. That, she suggested, could lay the groundwork for a tax increase to maintain the increased construction after the bond money was used up.

"Can they go back to the old way?" she asked.

But Bray said she has not made a decision on the proposal yet. The bonds would give the department immediate money for a short-term solution, she said.

But Highways Department Spokesman Steve Forsythe insisted the department does not intend to seek gas tax increase.

The department expects to pay back this half billion dollars from existing funds, Forsythe said. The $280 million accumulated from interest on the bonds would be repaid with the savings on the department, Forsythe said.

This means the department would have to "tighten its belt so it can pay back the bond money," said Harriet Beard, chairman of the Missouri Highways corridor coalition.

Gov. Mel Carnahan's office is reviewing details of the Highways Department's proposal, said Chris Sifford, the governor's spokesman.

"We're not opposed to it if it makes economic sense," Sifford said. "We would have serious reservations if there were to be a tax increase."

In 1987, voters approved a 4 cent gasoline tax increase to fund highway construction projects. In 1992, the General Assembly approved another 6 cent increase in gas taxes - without voter approval.

The department bonds would be issued to cover funds in an effort to finish highway construction projects promised in 1987 and in 1992.

"It's bad when taxes passed and then get left by the wayside," said Rep. John Griesheimer, R-Washington. "We can't go into the future without the money to pay for it."

Griesheimer said the bonds would be beneficial especially in rural areas.