NewsTracker Tax and Budget

Surplus Remains a Roadblock to Gas Tax Increase

Haslam barnstorms TN touting TDOT revenue shortfalls

Gov. Bill Haslam went on the road again this week trying to pave the way for lawmakers to take up the politically combustible topic of increasing taxes on gasoline and diesel.

The governor popped in Monday on brief events across Tennessee aimed at raising awareness about sinking transportation-allocated revenues. Among his destinations were Alcoa, Kingsport, Chattanooga and Memphis before heading back to Middle Tennessee in the evening.

“We are talking about something that affects every citizen,” the governor said during his first East Tennessee pitstop. “It is how we get our kids to school, how we get to work and back. It is how goods that our farmers grow and our manufacturers build, how they get those products to their markets all across the state. So, this really is an issue that affects everybody in the state.”

“We have been the beneficiaries of some responsible people who came before us, and I would like for us to show that same sort of responsibility.”

Automobile drivers who fill up with gasoline in Tennessee pay about 40 cents a gallon in tax — 21.4 to the state and 18.4 to Washington.

Diesel users pay about 43 cents per gallon in taxes in Tennessee — 18.4 cents in state tax and roughly 6.1 cents a quart to the federal government.

The state’s current fuel tax rates have been in place since 1989.

The governor, his transportation department staff and the state comptroller’s office contend that gas and diesel tax revenues at current rates are insufficient to take care of existing roadway infrastructure.

“Cars and trucks are more fuel-efficient, construction and labor costs have risen, and Congress has not passed a long-term transportation funding bill in 10 years,” a Haslam press release Monday said.

However, the administration has yet to float even a ballpark per-gallon tax-increase figure for lawmakers to pitch to their constituents.

“We’re not there yet,” said B.J. Doughty, communications director for the state Department of Transportation. “We are just taking about needs.”

TDOT officials say they’re “backlogged” to the tune of more than $6 billion on unfunded projects. At each of the governor’s events he and Transportation Commissioner John Schroer spotlighted local road-expansion proposals on the to-do list.

The projects Haslam and Schroer set out Monday to call attention to were:

  • Alcoa Highway in Blount County – $271.7 million
  • State Route 126 in Kingsport – $98.7 million
  • I-24/I-75 Interchange in Hamilton County – $65 million
  • Lamar Avenue in Memphis – $229.1 million
  • I-40 in Lebanon – $61.6 million

“We do feel like it is important for the legislators to see these lists of projects and keeping the conversation going,” Doughty told TNReport Monday evening. “It is really a matter of, ‘Do you want these projects, and if so, how soon do you want them?’”

Making the situation more critical are projections that “Tennessee’s population is expected to grow by 2 million by 2040, which puts a greater demand on the state’s infrastructure,” according to the Haslam administration.

Nevertheless, when the Tennessee Legislature convenes in January, Haslam will likely knock up against the same political embankment that’s been a barrier to him the last several months.

A lot of Republican lawmakers in both GOP-run chambers of the General Assembly are in no way primed to try convincing registered voters in their districts that taxpayers ought to be paying more at the pump — especially given that Tennessee is on track this year to again overcollect existing taxes state government is budgeted to spend.

“I am not comfortable going to my constituents and explaining why we are going to raise taxes on anything when we have a surplus in the general fund,” Mark Pody, a Republican state representative from Lebanon, said Monday. “I would not feel comfortable with that at all.”

Pody was one of a handful of regional government officials and business leaders from around Wilson County who turned up at a Lebanon outlet mall off I-40 to hear the governor deliver his last spiel of the day. Due to inclement weather in the area, though, Haslam’s plane from Memphis was delayed and the event was cancelled at the last minute.

All the same, Pody said he’s not been unmoved by the case Gov. Haslam and state transportation officials have been making. He agrees additional funding is needed to maintain and improve Tennessee thoroughfares.

“We have to find a way to get TDOT more money,” he said. “I am very, very comfortable doing that. But we need to decide what the best way to do that is.”

Like many of the lawmakers already on record opposed to a gas-tax increase, Pody supports topping off the road-budget next year with at least $260 million in general-fund dollars. That’s roughly the amount transportation advocates in the Legislature say was inappropriately tapped a decade ago from the state’s gas-tax revenue tank and used to fuel other government programs.

Jim Tracy Bill HaslamJim Tracy, a Shelbyville Republican who chairs the Senate Transportation Committee, is leading the charge both to raise awareness about TDOT funding shortfalls and replace the “raided” $260 million.

Like Haslam, Tracy has traveled the state recently himself talking about transportation issues. He was also among those on hand in Lebanon waiting for Haslam in the rain. And Tracy opposes raising the gas tax in 2016 as well.

Pody intends to push legislation next year that would permanently allocate sales-tax money collected from consumer purchases of auto and truck tires in Tennessee toward TDOT. He said the bill will be sponsored in the Senate by Mt. Juliet Republican Mae Beavers, another foe of hiking the gas tax.

He acknowledged that dedicating taxes on tire-sales to roadbuilding won’t pay for all TDOT’s list of projects.

“It is not going to be tens of millions of dollars — it is not enough to do everything that we need done,” Pody said. Still, ideas like that are much more palatable to penny-conscious politicians and voters at this stage, he said. “Rather than raising the gas tax, I would rather do something like that.”

Haslam hinted Tuesday that he may be getting the message that support is lacking in the Legislature for a gas tax hike in 2016. “I don’t know that we have to address it this year, but we have to address it while I’m governor,” he said. “I’ll just put it that way. Or the state will really be behind the eight ball.”

One reply on “Surplus Remains a Roadblock to Gas Tax Increase”

In most things other than high ranking state government officials’ salaries, Tennessee ranks in the mid-forties among states. Our roads consistently rank in the top five. When they drop into the thirties, come talk to the taxpayers again. As for the near future, no gas tax increases! No way no how!!

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