Sponsor proposes cap on MoDOT internal spending; critics warn cities, counties could lose funds

Representative Josh Hobert presented House Bill 572 to the House Committee on Corrections and Public Institutions as a measure intended to restore legislative guardrails on the Missouri Department of Transportation's internal spending. Hobert said the bill responds to court decisions that affirmed MoDOT's discretion over the state road fund after the 2021 motor fuel tax increase enacted in Senate Bill 262.

Hobert described the bill's mechanics: set an internal‑spending cap (he said he initially set 18 percent) and impose a penalty of a 1‑cent reduction in the motor fuel tax rate for the next fiscal year if MoDOT exceeds that cap; the commission could regain the lost penny by returning internal spending below the cap. Hobert said the cap and penalty are negotiable and that he expects to raise the cap modestly (he referenced shifting the cap to about 20 percent in subsequent negotiations) and lower the penalty in committee discussions.

MoDOT Deputy Director and Chief Engineer Eric Schrader testified in an informational role, outlining unintended consequences. He said external spending — including federally funded projects and designated projects such as I‑70 — can fluctuate based on federal reauthorizations, and if external spending falls the internal share will rise even without internal increases. He warned that internal costs largely cover salaries and benefits and that reductions tied to the bill could force staff cuts; he also noted that every penny of state fuel tax serves as a match to federal funds, so losing state match can reduce federal dollars for projects.

Municipal and county officials, the Missouri Chamber of Commerce and other business groups opposed the bill. Richard Sheets of the Missouri Municipal League and Gary Youngeerman of the County Commissioners Association said a reduction in the motor fuel tax would reduce distributions that cities and counties rely on for roads: cities receive a share (witnesses described a 15% distribution formula for municipalities) and counties receive a larger share for locally maintained roads. The Missouri Chamber and Callaway County warned the proposal could imperil local projects and long‑term infrastructure planning.

Several rural county witnesses detailed rising local construction costs and warned that losing fuel‑tax revenue would force the delay or cancellation of local road maintenance and equipment purchases. Several speakers urged greater transparency from MoDOT, including release of board meeting packets and contract information. The committee heard questions about whether the bill would affect county and municipal distributions and whether an amendment could exclude those distributions; witnesses differed on the effect and legal mechanics.

The hearing ended with no recorded committee vote. The sponsor and MoDOT staff said they had engaged in preliminary discussions and anticipated further negotiation and potential amendments before any final committee action.