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TN Transportation Coalition: Comptroller Report on Transportation Funding ‘Timely, Insightful’

Press release from the Transportation Coalition of Tennessee; January 20, 2015:

NASHVILLE, Tenn. – The report released by the Tennessee Comptroller of the Treasury today regarding challenges and options for transportation funding is timely and insightful. We should all recognize that we are at a crossroads in terms of our transportation infrastructure. Do we make the investment that will enable our state to meet the demands of the future?

We know good transportation infrastructure means safer roads and bridges for our residents and visitors. We know good transportation infrastructure is a key driver in economic development.

This may well be one of the most critical issues being faced by our state leaders this year. The comptroller’s report accurately notes that “Tennessee’s fuel taxes are not expected to be sufficient to maintain existing infrastructure and meet long-term transportation demands.” The state Department of Transportation has already identified more than $8 billion in projects that are backlogged due to lack of funding, and have stopped engineering work on new construction.

Members of the coalition are looking forward to working with our state leaders to identify possible solutions for this problem.

ABOUT THE TRANSPORTATION COALITION OF TENNESSEE

The Transportation Coalition of Tennessee was created to educate the public and state legislators as it seeks an increase and reform in Tennessee’s transportation fees. The coalition aims to recruit other interested parties to join in seeking a comprehensive funding solution to maintain and expand Tennessee’s critical transportation system.

Participants in the Transportation Coalition of Tennessee include businesses, citizens, community leaders, public officials and organizations that are interested in continuing Tennessee’s transportation infrastructure for the long haul.

The Transportation Coalition steering committee includes representatives from the Tennessee Infrastructure Alliance, Auto Club Group/AAA Tennessee, Tennessee Public Transportation Association, Tennessee Trucking Association, Tennessee County Highway Officials Association, Tennessee Municipal League, American Council of Engineering Companies of Tennessee and Tennessee Road Builders Association.

Tennessee is a pay-as-you-go state, with transportation projects funded primarily by state and federal fuel tax revenues. The dollars are apportioned for state and local projects, which include maintenance, repair and new construction.

For more information or to join the Transportation Coalition of Tennessee, visit the website at www.TransportationCoalitionTN. org.

A full copy of the comptroller’s report can be found at http://www.comptroller.tn.gov/ repository/RE/Transportation% 20Report%20Final.pdf.

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Business and Economy NewsTracker Tax and Budget

Congress Puttering Forward with Federal Gas Tax Discussion

As the average national cost of gas descends to $2 per gallon, a congressional discussion has reignited over the possibility of raising the federal fuel tax to meet shortfalls in the Highway Trust Fund.

U.S. Sen. Bob Corker, Tennessee’s junior Republican senator, announced a bipartisan proposal in June to increase the federal gas tax by 12 cents over two years, and index it to inflation so “it remains viable into the future.”

The legislation, co-sponsored by Connecticut Democrat Chris Murphy, “would provide enough funding to offset current MAP-21 spending levels over the next 10 years,” as well as replace “the buying power” the tax has lost since last raised to 18.4 cents per gallon in 1993.

Corker’s plan also calls for tax relief to offset the burden for Americans. Corker wasn’t specific about what the relief will look like, but a press release indicates it could include “permanently extending” tax breaks included in the “tax extenders” bill, or “another bipartisan proposal” to cut taxes over the next decade by “at least the amount of revenue” the fuel tax raises.

Over the past several years, Congress has approved several short-term fixes to the fund — transferring $54 billion from the Treasury Department’s general fund since 2008 — and the fund will face another shortfall in 2015.

“Growing up in Tennessee as a conservative,” Corker said in the release, he learned something important enough to have was important enough to pay for. “If Americans feel that having modern roads and bridges is important then Congress should have the courage to pay for it.”

However, the two-term senator also said whether or not Congress’s solution amounts to a tax increase, he’d like to see a permanent fix to the highway trust fund by May.

Although the proposal was met with lukewarm response last Summer when gas was around $3.50 a gallon, the recent sharp decline in fuel costs — influenced in part by the U.S. oil boom and OPEC’s refusal to cut production — has emboldened the former Chattanooga Mayor to again take up the issue.

Other senators — including Republicans John Thune of South Dakota and Jim Inhofe of Oklahoma, chairmen of the Senate committees on Commerce, Science and Transportation, and Environment and Public Works, respectively — have recently said they won’t rule out a fuel tax hike. Similarly, Utah Republican Orrin Hatch, chairman of the Senate Finance Committee, said last week “It’s a small price to pay for the best highway system in the world.”

However, the proposal has been met with more skepticism in the U.S. House.

Speaker of the House John Boehner, an Ohio Republican in his third term as speaker, said that while a new highway funding bill is a priority for this year, he isn’t hot on the idea of raising taxes.

And Marsha Blackburn, a Republican representing Tennessee’s 7th Congressional District, said on Fox Business this week that while raising taxes may be “a quick fix,” it’s “the wrong step to take.” Instead she suggested legislators look at the structure of the trust fund, and fix the root of the problem.

Categories
NewsTracker Tax and Budget

Gas-Tax Talks Not on Administration’s Immediate To-Do List

State transportation officials say the state needs to start thinking about how to charge drivers for using state roads, but the governor says there’s no consensus to tackle that issue this year.

While the state transportation department says the issue is squarely on the administration’s radar, Gov. Bill Haslam says the topic won’t be among those he’s interested in come 2013.

“We definitely won’t be addressing that this year,” Haslam told reporters Thursday following an economic development announcement in Nashville, adding that both he and Transportation Commissioner John Schroer believe it’s “inevitable” that the state will have to address that issue down the road.

“The way we’re paying for roads and bridges now won’t work long-term. And I think John’s acknowledging that. That being said, there’s not much consensus about how you do fix that problem,” he said.

Schroer is in the middle of a fall tour to various transportation projects across the state. The department has $9.5 billion worth of projects under development, but only has about $900 million to work with this year.

The issue is nothing new to Tennessee. Schroer told the governor and other high-ranking officials during budget hearings last year that the state will need to reconsider how it collects money for roads as people shift to vehicles that guzzle less gas.

Tennessee charges 21.4 cents a gallon for gasoline, ranking in the bottom third of state gas tax rates in the country, according to the American Petroleum Institute. The state tax on diesel is 18.4 cents a gallon. That’s on top of a federal tax of 18.4 cents a gallon on gasoline and 24.4 cents a gallon on diesel.

The Beacon Center suggests the state consider other options besides simply raising the tax on fuel. The free-market think tank released a report this week analyzing the state’s various options, like charging taxes based on miles traveled, emissions or installing toll roads.

Not all the money from the gas tax is spent on highways. Across the country, the gas tax has been diverted for other projects, including schools, parks and beautification.

Haslam last year said it’s possible he’ll put off serious talk about rejiggering gas taxes until a possible second term.