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Harwell: Gas-Tax Increase ‘Difficult’ In 2016

Focus instead is on growing general-fund surplus for bumping up transportation funding

Tennessee House Speaker Beth Harwell says there’s appreciable support among lawmakers for putting more money toward the state’s road budget next year.

“People are interested in our infrastructure — in how much money we are spending, maintaining it, even producing more roads, because they are a huge part of economic development. So I think legislators will be taking a look at that,” said Harwell, a Nashville Republican first elected to the Legislature in 1988.

But it’ll be “difficult” for the General Assembly in 2016 to muster the votes to elevate the per-gallon tax rate motorist pay for gasoline in Tennessee, the speaker told TNReport in Cookeville Thursday evening following a town hall meeting of her Task Force on Rural Economic Development.

Gov. Bill Haslam has been trying to build pressure on legislators the past few months raise the state’s current 21.4 cent per gallon gasoline tax, although he’s yet to say just how much more he thinks motorists ought to be paying at the pump. The diesel tax is 18.4 cents a gallon, and like the tax on gasoline, hasn’t changed since the late 1980s.

Harwell reiterated her view that before any tax increase gets a seriously look by GOP lawmakers, money that was removed from the transportation budget a decade ago ought to be rerouted back toward roads.

In the Senate, Transportation Committee Chairman Jim Tracy favors that as well. The Shelbyville Republican is sponsoring legislation to put $260 million from the general fund into the transportation spending outlay for the next fiscal year.

Typically, the taxes paid on gas and diesel purchases in Tennessee are designated to fund transportation projects. But under previous governors, Republican Don Sundquist and Democrat Phil Bredesen, funding was taken from fuel tax reserves and put toward the general fund.

Harwell noted that the state is currently taking in more sales-tax and other revenues than what the General Assembly and the governor’s administration budgeted for during the last legislative session, which ended in April.

Year-to-date collections for the first three months of the the current fiscal year have been $223.3 million more than the budgeted estimate, according to the latest revenue tallies compiled by the Tennessee Department of Finance and Administration. The general fund now has $207.8 million more in it than state government is legally authorized to spend.

“Our revenues are increasing in the state and we have some extra money there,” Harwell said. She suggested the state “restore that money that we took from the Department of Transportation during a rough time in a previous administration — restoring that so they at least have equal footing there in that funding.”

Gov. Haslam has said he’s willing to entertain the idea of rerouting general-fund dollars toward roadbuilding and maintenance. But he also says there’s vastly more transportation infrastructure need than surplus tax-collections can pay for.

One reply on “Harwell: Gas-Tax Increase ‘Difficult’ In 2016”

The way the gas tax is collected is counter-intuitive – as cars become more fuel efficient, the amount of taxes collected become less, but the cost of maintaining and building new roads to accommodate the increase in “road miles driven” goes up.

I agree the funds that Sundquist and Bredesen pulled from the reserve should be returned, but this will only be one-time money, aka, kicking the can down the road.

If we want good roads (and if you don’t, that’s fine, just don’t complain), we have to be willing to pay for them. This is one tax where the people paying are most likely to get direct benefit from what they paid in versus other taxes where you may get little or no direct benefit from where the money goes.

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