The Missouri Highways and Transportation Commission can spend more on salaries than lawmakers appropriate if there is enough money in the Road Fund, a Missouri Western District of Appeals panel of Judges Gary Witt, left, Mark Pfeiffer, center and Thomas Chapman ruled Tuesday. The judges are shown during oral arguments Nov. 7 at the University of Missouri’s law school. (Annelise Hanshaw/Missouri Independent).
Missouri Department of Transportation employees are entitled to raises included in a market pay plan even if lawmakers haven’t appropriated enough money to cover the cost, the Western District Missouri Court of Appeals ruled Tuesday.
In the unanimous decision, Judge Gary Witt wrote that the Missouri Constitution is unambiguous in the power it gives to the Highways and Transportation Commission to spend money in the state Road Fund.
The only off-limits money in the Road Fund, Witt wrote, is the portion set aside for debt payments.
“Once MHTC complies with these requirements,” Witt wrote, “MHTC retains sole discretion in using and expending the remaining balance of the State Road Fund in accordance with the constitutionally permissible uses.”
The ruling comes less than three weeks after the three-judge panel heard arguments and, barring a final appeal to the Supreme Court, ends a case that began in 2021 . The decision upholds a trial court ruling from Cole County.
The dispute began when Commissioner of Administration Ken Zellers refused to issue paychecks that included raises intended to stem rapidly rising turnover in the department.
The heart of the case is language in the Constitution that states money in the Road Fund shall “stand appropriated without legislative action” for the limited purposes of road construction and maintenance. Money in the road fund comes from fuel taxes and license fees.
“The payment of the employees of MHTC is within the constitutionally permissible uses of the State Road Fund to ‘employ such personnel as necessary,’” Witt wrote.
MoDOT did not respond to a request for comment on the ruling. The Attorney General’s office, which represented Zellers, also did not respond.
In opposing the pay raises, Deputy Solicitor General Sam Freedlund argued to the appeals court that only the debt obligations of the commission could be paid if lawmakers did not appropriate sufficient money. Otherwise, the legislature must appropriate the money, he said.
“All sorts of agencies, I’m sure, want to pay their employees different amounts, but it’s the legislation that ultimately controls the public purse strings,” Freedlund said.
The judges were skeptical of that argument in the hearing and the ruling shows why. The constitutional language, Witt wrote, “unambiguously provides that the entire State Road Fund stands appropriated without legislative action.”
The language has never been tested previously because the commission stayed within the annual appropriations made by lawmakers. The market plan went outside the appropriations in an effort to stem massive turnover in the agency.
The department lost an average of 600 employees per year from fiscal 2018 to fiscal 2021 out of an employee base of about 5,000. During that period, state pay raises were small or non-existent.
Turnover has remained high — 14%, or 654 employees in fiscal 2024 — even as pay raises became more generous throughout state government. Since the lawsuit started, state employees generally have received raises equaling almost 21% more than their salaries in 2021.
The commission’s goal for the pay plan was to raise pay levels so 65% of MoDOT employees are at or above the midpoint in the pay range for their job. In the fiscal year that ended June 30, 2024, 89.3% were below the midpoint, according to state budget documents.
“The payment of the employees of MHTC is within the constitutionally permissible uses of the State Road Fund to ‘employ such personnel as necessary,’” Witt wrote.
The lawsuit was filed two months after the first state fuel tax increase in 27 years took effect. State lawmakers approved the tax increase – 12.5 cents per gallon phased in over five years – without seeking a statewide vote.
So far, the tax increase has added 10 cents a gallon to the cost of fuel and when fully implemented on July 1, 2025, motorists will be paying a total of 29.9 cents per gallon in state fuel taxes.
The lawsuit enraged some lawmakers. State Sen. Cindy O’Laughlin, and five other Republican senators, in a February 2022 letter to the commission, demanded that MoDOT Director Patrick McKenna either resign or be fired.
McKenna survived the attacks. In August, after securing a new job, he told the commission he was resigning after nine years.
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