The director of Missouri’s transportation department is facing calls for his ouster from Republican lawmakers who contend he’s broken trust with the public with a plan to give worker pay raises just months after a new state gas tax took effect.
In December, the Highways and Transportation Commission sued Acting Commissioner of Administration Ken Zellers because he refused to issue paychecks with raises that lawmakers did not include in this year’s appropriations.
In a letter to the commission dated Jan. 18, Sen. Cindy O’Laughlin of Shelbina, Appropriations Committee Chairman Dan Hegeman of Cosby, and four other Republican senators demanded that MoDOT Director Patrick McKenna either resign or be fired.
“Regardless of the legality of this move, it is a gross violation of the public’s trust and a setback that the department and the state’s road system cannot afford,” the letter states.
In an interview Tuesday, O’Laughlin said the money earmarked for the raises and benefits — $60 million — could be better spent on crumbling roads in her north Missouri district.
“I think that is the crux of the matter,” she said. “He is not in touch with what is happening, especially in rural Missouri.”
The raises would cost far more than a general pay raise plan from Gov. Mike Parson that is currently pending before the House Budget Committee.
During a Monday hearing of the Joint Committee on Transportation, McKenna said the raises are justified to combat increasing turnover in the 5,100-employee department. Over the past five years, the turnover has averaged 600 employees per year. In 2021, that increased to 828.
As a major winter storm approached Monday, the department issued a press release asking for patience from the public because staffing shortages meant clearing highways of ice and snow will likely be slower than in the past.
“By and large, 75 to 80% of our turnover over the last several years has been because we’re considerably off-market for engineers, construction inspectors, technicians and even our operators are CDL operators,” McKenna told the committee.
Increasing the pay of 3,000 field-based employees by one cent an hour costs $105,000, McKenna told the committee. Adding $3 an hour to the pay of people in jobs with starting wages of $15 an hour will cost $35 million, he said.
Some employees, he said, are as much as $9 an hour below wages in comparable jobs elsewhere.
With an infusion of new state fuel taxes and a massive federal infrastructure program to manage, stopping turnover and attracting new employees will be a top priority of the department, McKenna said.
“What we’re focused on is the field operations and the ability to have a program,” McKenna said. “We’ve got a program that’s increasing potentially 50%. We need the people to put the program out so that the contractors can do the work.”
The lawsuit
On Feb. 10, Cole County Circuit Judge Cotton Walker will hear argumentsthat will determine whether the department can spend funds in excess of the amount appropriated by lawmakers.
The lawsuit seeks a declaration from Walker that, in essence, the department doesn’t need appropriations at all.
The state highway fund is unusual because the Missouri Constitution states that the money shall “stand appropriated without legislative action.” That means the Highways and Transportation Commission can use the money for any purpose listed in the constitution, without limitation and without reference to what lawmakers put in appropriation bills, attorney James Layton, former solicitor general who is representing the commission, wrote in the latest filing in the court case.
“It may be convenient,” Layton wrote. “It may even be that references to appropriations bills are built into the state’s SAM-II accounting system. But it cannot be required under the constitutional language.”
On behalf of Zellers, Attorney General Eric Schmitt’s office cites a separate section of the constitution, arguing that no money can be drawn from any fund of the state “except in pursuance of appropriations made by law.” The language is essentially unchanged since the state’s first constitution in 1820.
“The key question raised by the petition is whether the Commissioner of Administration is required to certify an expenditure for payment from the state road fund in the absence of an appropriation law passed by the General Assembly,” Assistant Attorney General Emily Dodge wrote. “The answer to that question is no in light of the plain language of…the Missouri Constitution.”
To cover the cost of the raises, the department intends to spend $37 million on salaries and wages and $22.4 million for increased benefit costs, mainly to cover higher pensions when those employees retire.
Funding the raises would increase the department’s payroll budget to more than the $276.2 million approved by lawmakers for the year and the cost of benefits would exceed the $242.4 million allowed by appropriations.
In the filing, Layton draws a parallel between the highway commission’s lawsuit and one Walker decided in April 2021 that allows the Conservation Commission to spend its appropriations for any purpose within its constitutional authority.
The commission wanted to purchase land in St. Clair County for a conservation area and the appropriation bill sought to block the Department of Conservation from acquiring any land during the fiscal year. Walker ruled that lawmakers do not have that authority.
Now on appeal to the Supreme Court, Schmitt’s office draws a distinction in that case between the conservation fund and other state funds with automatic appropriations, including the highway fund, to argue that the conservation fund is subject to the legislative appropriations power.
“Unless funds stand appropriated by the Missouri Constitution or the Constitution mandates an appropriation be made, it is indisputable that the General Assembly possesses the power to make or refuse to make an appropriation,” John Sauer, solicitor general, wrote in the Supreme Court brief.
That argument, Layton wrote, undermines the pleadings in the highway fund case.
“The attorney general expressly recognized that ‘when the text of the Constitution provides that funds ‘stand appropriated,’ the legislature simply has no role in the appropriations process,’” Layton wrote.
That is not true, Dodge wrote in reply. The road fund stands appropriated only to be sure payments on state road debt are made on time and to reserve enough to make payments in the coming year.
“The Commissioner of Administration is not required to certify for payment expenditures as directed by (the highways commission) without regard to the amounts appropriated by the General Assembly in appropriation laws,” Dodge wrote.
A ruling in the conservation case, which could include the court’s view on what the phrase “stand appropriated” means, is expected soon. The court heard arguments in October.
The raises
In the department’s budget request for the coming fiscal year, it states that it is making a “market adjustment” so that 65% or more of its employees are at or above the midpoint in the pay range for their job. During the fiscal year that ended June 30, almost 92% of department employees were below the midpoint.
Parson is proposing a 5.5% pay raise for the entire state workforce, as well as a $15 an hour base wage for state employees. Neither the supplemental appropriations bill that would fund the raises, nor Parson’s budget for the coming fiscal year, endorse the highway department plan.
Parson’s proposal would cost the state road fund less than half of what the highways commission wants to spend. For a full year, Parson’s plan would cost $24.2 million, with $15.1 million for raises and $9.1 million for benefits.
In Monday’s hearing, Sen. Justin Brown, R-Rolla, asked McKenna why that wasn’t acceptable. The legislature approved a tax hike, he noted, and there is broad support for Parson’s pay raise plan. Brown is one of the six Senators who signed the letter demanding McKenna’s resignation.
“You know, we’ve given MoDOT the tools they requested to fix this crumbling infrastructure that you keep talking about,” Brown said. “But all we’re hearing about in the building is about pay raises, and then all of a sudden the commission is suing the state over it.”
As he did for other questions, McKenna emphasized the turnover in the department and the increasing cost of training new employees.
“The issue of investing in roads and bridges is intimately tied to the actual people that put the projects out, that also then come in and maintain those systems,” McKenna said.
In the letter, the six Republican senators said they feel betrayed by the department after lawmakers voted to increase the gas tax last year.
“In what can only be categorized as a classic bait and switch, the director and his leadership team pleaded with the legislature for his entire tenure that he needed more funds to improve our state’s deteriorating system,” the letter states. “Within months after receiving legislative authority to fund our state’s high priority roads and bridges, Director McKenna announced he would change his priority and intended to divert the state’s road and bridge dollars to pay raises and personnel.”
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