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.

Press Releases

State Transportation Plan Released

Press release from the Tennessee Department of Transportation; April 12, 2012:

NASHVILLE – Tennessee Gov. Bill Haslam and Tennessee Department of Transportation (TDOT) Commissioner John Schroer today released the 3 year transportation program, featuring approximately $1.5 billion in infrastructure investments for 96 individual project phases in 55 counties, as well as 10 statewide programs.

TDOT is one of only five state DOT’s that does not borrow money to fund projects, and the program continues TDOT’s “pay as you go” philosophy, carrying no debt for any transportation initiatives.

“This program balances transportation needs across Tennessee, focusing on improvements to strategic corridors, maximizing economic development opportunities, and providing key safety improvements,” said Governor Haslam. “A quality transportation system is vital to our goal of making Tennessee the No. 1 location in the Southeast for high quality jobs and the continued growth of the state’s economy.”

The 3 year multimodal program funds improvements to the interstate system, including the addition of truck climbing lanes, ramp enhancements, and interchange reconstruction projects.

The program also dedicates funding to projects along strategic corridors such as US 27 in Roane, Morgan and Scott Counties; US 79 in Carroll and Gibson Counties; and the completion of US 64 in middle and west Tennessee.

“We have worked diligently to develop a multimodal program that maximizes the dollars available to Tennessee and provides positive improvements in our urban and rural areas,” TDOT Commissioner John Schroer said. “We are also continuing efforts to improve safety, reduce congestion, and provide access to communities.”

The program includes a project to increase safety on US 11E (SR 34) with the construction of a new interchange at SR 37. Another project will modify an interchange on I-26 to address congestion issues at SR 75 (Exit 13).

Under the plan, TDOT will fund several projects aimed at stimulating economic development in communities across the state, including US 78 (Lamar Avenue) in Memphis and a new interchange on I-65 at SR 109 in Sumner and Robertson Counties. TDOT will use an innovative approach to accelerate the reconstruction of the interchange at I-40 and SR 222 to facilitate access to the West Tennessee Megasite in Haywood and Fayette Counties.

The program includes dedicated funding for 10 transportation programs including Rockfall Mitigation, Spot Safety Improvement, and the statewide HELP Program. It also provides funding for transit agencies, Metropolitan and Rural Planning Organizations, and private non-profit organizations in all 95 counties in Tennessee. TDOT will also administer funding for rehabilitation projects for shortline railways and bridges in several Tennessee counties as well as programs that provide for improvements at the state’s airports.

Please see the attached list of highlighted projects in each of TDOT’s four regions. To view a complete list of projects and programs funded through the 2012-2015 three-year multimodal program visit

Press Releases

TDOT To Open Closed Construction Lanes For Holiday Travelers

State of Tennessee News Release; Dec. 21, 2011:

TDOT Halts Highway Construction for Busy Holiday Travel Period

No Lane Closures on Interstates and State Routes from December 23 to January 2

NASHVILLE – Holiday travelers should enjoy a smooth drive through Tennessee during the busy Christmas and New Year’s travel holidays. The Tennessee Department of Transportation (TDOT) is once again halting all lane closure activity on interstates and state highways in anticipation of higher traffic volumes across the state.

No temporary lane closures will be allowed for construction on Tennessee roadways beginning at noon on Friday, December 23, 2011 through 6:00 a.m. on Monday, January 2, 2012.

“Nearly two million Tennesseans are expected to hit the roads to visit family and friends during this busy holiday travel period,” said TDOT Commissioner John Schroer. “We want to do everything possible to minimize delays and provide maximum capacity on Tennessee roadways. We also want drivers to obey the rules of the road and arrive safely at their destinations.”

Except for a few long-term closures which must remain in place for safety, all construction related closures will be suspended during the holiday period. Workers may still be on site in some construction zones. Drivers should obey all posted speed limits, particularly in construction areas. Slower speeds are necessary in work zones due to the temporary layout of the roadway and will be enforced. Drivers convicted of speeding through work zones where workers are present face a fine of $250 to $500, plus court fees and possible increased insurance premiums.

“Drivers can expect to see increased law enforcement on the roads throughout the holiday with a particular focus on stopping drivers who are impaired,” said Governor’s Highway Safety Office Director Kendell Poole. “We want everyone to have a safe holiday so remember to buckle up, drive the speed limit and don’t get behind the wheel of a vehicle if you’ve had anything to drink.”

AAA predicts holiday travel will increase nearly 2% in Tennessee this year, with more than 1.8 million expected to travel by automobile in the volunteer state between the Christmas and New Year’s holidays. Across the U.S. 83.6 million people are expected to drive to their year-end holiday destinations, which represents 30% of the total U.S. population.

For up-to-date travel information, motorists may call 511 from any land line or cellular phone or visit TDOT is also on Twitter. For statewide travel tweets follow Smart phone users can use the TDOT SmartWay Mobile website at to access TDOT’s SmartWay cameras, incident information and messages displayed on overhead Dynamic Message Signs. Motorists are reminded to use all motorist information tools responsibly. Drivers should refrain from texting, tweeting or using a mobile phone while operating a vehicle. Drivers should “Know before you go!” and check traffic conditions before leaving for your destination.

Business and Economy Featured News

Lawmakers, Haslam Sideline Talk of Gas Tax Increase

Lawmakers have mulled for years whether to restructure gasoline taxes to make up for consumer shifts to fuel-efficient vehicles, but the House Transportation Committee chairman says there’s little desire to tackle that right now.

“There’s no political will for a gas tax increase when you’re dealing with gas over $3 a gallon,” said Chairman Phillip Johnson, R-Pegram, adding options could include charging drivers a tax based on their mileage.

“It’s just a matter of coming out with something that will have enough votes to pass. There just really hasn’t been any particular solution or idea we’ve come to agreement on,” he said.

Gas collections that fund state transportation will eventually stall out, Tennessee Department of Transportation officials warned earlier this month, although Gov. Bill Haslam has ruled out reconfiguring the gas tax for at least two years.

“We’re not close to proposing a change on that, but I think all of us can look and say logically there’s no way 10 years from now we’re doing it the same way we are now,” Haslam said last week.

“It will not be something we propose doing this year and probably not next,” he said.

At a budget hearing this month, TDOT officials said that the state will need to figure out how else to fund the department amid rising costs to fix roads as gas tax collections continue to stagnate as they did this past year.

Tennessee taxes gasoline at 21.4 cents a gallon, which ranks among some of the lowest rates in the nation. The feds tax gas at 18.4 cents per gallon, for a total rate in Tennessee of 39.8 cents.

Last year the state collected $606 million in gasoline taxes, slightly up from $601 million the year before. Back in 2008, just before the recession settled in, the state collected $622 million in gasoline taxes.

About 40 percent of those dollars are siphoned off for cities and counties or deposited into the state’s general fund. The remaining $255 million last year stayed with TDOT, although state officials said they didn’t know exactly how much is directed to road projects versus non-road or administrative costs, saying the dollars are used throughout the department.

TDOT officials are proposing an $800 million state budget for next year, an 8 percent decrease from last year.

Tennessee roads are consistently rated by truckers and industry experts as among the best in the nation, according to Overdrive Magazine and the Asphalt Pavement Alliance.

Although the governor says he’s not focused on addressing the gas tax now, any conversation down the road should include ensuring the user tax on gas is spent on roads instead of giving it away to non-road projects, according to one key interest group.

“The state fuel tax is a user fee. Meanwhile, we’re seeing the growth in that slow down. It’s the only mechanism we have,” said Kent Starwalt, executive vice president of the Tennessee Road Builders Association.

The association has supported efforts in the General Assembly to find a dedicated funding source for mass transit like light rail. But until that happens, the gas tax “is the only mechanism we have,” Starwalt said.

The declining use of gasoline is a “big, big issue” in Tennessee and the country, Transportation Commissioner John Schroer said during his department’s budget hearing.

Gas tax collections have been flat if not down slightly, said Schroer. Some of that is due to the recession, but it’s also indicative of drivers shifting to more fuel-efficient vehicles, he said.

“The trend for us is going the wrong direction as far as the amount of money we will see. We will, I think, in my opinion, continue to see less and less as we go along,” said Schroer, who said his office has spoken to legislative leaders on both the House and Senate transportation committees.

“The issue is it costs more and more to do what we’re doing, and we have more capacity, and we have an older, deteriorating infrastructure that gets more expensive to fix every single year,” he said. “It is an issue that not only we as a state are going to have to address but nationally we have to address it as well.”

Press Releases

TDOT Wraps Up ‘Project Tours”

Press Release from the State of Tennessee, Oct. 7, 2011:

NASHVILLE – Tennessee Department of Transportation (TDOT) Commissioner John Schroer has completed the first annual statewide tour of projects in each of TDOT’s four regions. The week-long tours, which began in late June in Chattanooga, concluded last week in Roane County. The tours were designed to give local, state, and transportation officials an opportunity to view projects under construction in their areas and to learn more about future projects announced this year in TDOT’s Three Year Program.

“Not only was it important to me as TDOT’s new Commissioner to see the work we’re doing all over the state, but I wanted to provide the same opportunity to our state and local partners,” said Schroer. “This was also an excellent opportunity to hear concerns within communities and have productive discussions about improving Tennessee’s transportation system.”

Over the course of 16 days, the TDOT Projects Tour logged over 3,900 miles, making stops in 55 Tennessee Counties and viewing 134 projects either under construction or under development. Fifty-four city and county mayors joined the tour, as well as Governor Bill Haslam and 40 members of the Tennessee General Assembly, along with representatives from Tennessee’s Congressional Delegation.

“These tours were ambitious and required a tremendous amount of planning and coordination by TDOT staff,” added Schroer. “The excellent participation we had all across the state proves it was well worth the effort, and this is something I plan to continue during my tenure as TDOT Commissioner.”

Dates are not yet set for next year’s TDOT Projects Tours, but announcements will be made as plans develop.

Press Releases

Haslam Issues 3-Year Transportation Plan

State of Tennessee Press Release; April 28, 2011:

NASHVILLE – Tennessee Gov. Bill Haslam and Transportation Commissioner John Schroer today released the three-year transportation program, which prioritizes a number of important improvements to Tennessee’s interstate system and continues funding for transit, rail, water and aviation programs. The three-year Multi-modal Work Program for 2011-2014 includes 182 transportation projects and programs, including 45 individual projects on interstates, 30 transit, water, rail & aviation initiatives, and 29 transportation programs serving Tennesseans across the state.

“A quality transportation system is vital to the continued growth of the state’s economy and increasing job opportunities for our residents,” said Governor Haslam. “The commissioner and I believe this three-year program balances the needs of communities across the state and makes solid investments in Tennessee’s infrastructure.”

The three-year multimodal program funds the widening of Interstate 65 north of downtown Nashville, and the completion of corridor improvements to State Route 66 in East Tennessee between I-40 and Sevierville. The program lists projects funded for various stages of development, including location and environmental studies, preliminary engineering, right-of-way acquisition, construction, and many operational components in the first year of the plan. It also proposes funding for a portion of the second and third year plans leaving flexibility for additional projects in those years.

“Taking a multi-modal approach to transportation planning allows TDOT to be responsive to the citizens of this state, tailoring projects to provide the greatest benefits in both our urban and rural areas,” said TDOT Commissioner John Schroer. “The department will address a number of needs through this three-year program, including congestion relief, improving access to communities, and the replacement or repair of dozens of aging bridges.”

Under the plan, TDOT will complete the final year of the Better Bridges Program, the construction of State Route 840 in Williamson County, a new interchange on U.S. 11E at U.S. 19 E in Sullivan County, U.S. 64 in southern west and middle Tennessee, and the widening of U.S. 27 (State Route 29) in Hamilton County.

The program includes dedicated funding for 29 transportation programs including Rockfall Mitigation, Spot Safety Improvement, Transportation Enhancements, and Safe Routes to School. It also provides approximately $45 million per year in funding for transit agencies, Metropolitan and Rural Planning Organizations, and private non-profit organizations in all 95 counties in Tennessee. TDOT will also administer funding for rehabilitation projects for shortline railways and bridges in several Tennessee counties and programs that provide for improvements at the state’s airports.

To view a complete list of projects and programs funded through the 2011-2014 three-year multimodal program visit Video and audio clips with TDOT Commissioner Schroer regarding the three-year program are also available for download at and Project photos are available at

Business and Economy Education News

Haslam Talks Education, Economy, Budget at Small Biz Meet-Up

Gov. Bill Haslam offered some of the first glimpses Tuesday of what is happening in his budget process, while reiterating his two-pronged agenda of a jobs plan and education reform to a group of small business leaders in downtown Nashville.

Haslam got full-throated support of his plans from the hierarchy of Republican leadership in the Legislature, as Lt. Gov. Ron Ramsey, House Speaker Beth Harwell and Sen. Mark Norris, R-Collierville, the majority leader, all spoke to the group and backed Haslam’s proposals.

Haslam said Transportation Commissioner John Schroer has found $5 million in overhead that can be put into “building roads and fixing bridges, the sort of things the money is supposed to go to.”

He said Greg Gonzales, commissioner of Financial Institutions and a holdover from the administration of Gov. Phil Bredesen, has found ways to do without some assistant commissioners and refund money in banks’ fees.

Haslam hammered home his mission of looking at administrative costs, regulations and direct services and keeping as much focus as possible on the services.

“As much as possible, I don’t want to touch the part that’s direct service, whether it’s building roads or helping families that have issues around mental health or children’s services,” Haslam said. “We’re slowly making some headway.”

Haslam is expected to present a budget proposal March 14.

Haslam was back home after a three-day conference in Washington of the National Governors Association, and he used the gathering of the National Federation of Independent Business and the Home Builders Association of Tennessee to reinforce his intentions of keeping regulations from bogging down business. He also highlighted efforts at reforming education and making job recruitment his priority as governor.

Haslam even offered some insight on the job recruitment, noting that some employers can be a bit greedy.

“We are already out talking to several good prospects,” Haslam said.

“We have a lot of interest in Tennessee. I was amazed at the deal pipeline. I’m also amazed at what people want, quite frankly.”

Haslam told reporters he “easily could” weigh in on the issue of taking away collective bargaining from the teachers union in the state, an issue he has heretofore not voiced a position on, leaving it to legislative sponsors Sen. Jack Johnson, R-Franklin, and Rep. Debra Maggart, R-Hendersonville, to lead.

Haslam said there could be a “few more twists and turns” on the collective bargaining legislation, and it “depends on how that plays out” as to how much he would get involved.

Haslam’s emphasis on education reform has thus far focused primarily on his desire to change the teacher tenure process, extending the probationary period involved from three years to five years.

Ramsey noted that in his 18 years in the Legislature there have been two “sacred cows” in K-12 education that you just couldn’t talk about.

“They are tenure and collective bargaining. Guess what we’re talking about this year. Tenure and collective bargaining,” Ramsey said.

Ramsey recalled how he met with Haslam a few days after the election in November and talked about education reform.

“He started talking about how we need some kind of tenure reform in the state of Tennessee. I wanted to walk across the room and hug him,” Ramsey said.

Ramsey said his objection to the current system on collective bargaining is that teachers who are not represented by the Tennessee Educators Association are left out of the process and that the current system creates an adversarial relationship from the start.

Haslam, making a point about streamlining government, said he learned in Washington that about 80 federal agencies and commissions are involved in food safety. While Tennessee does not have that many agencies overlapping, he said he believes many state agencies and commissions do overlap. He described how he asked the reason for a fee in the state and was told it was to cover an additional cost to the government.

“Well, that’s not right,” Haslam said flatly. “We want to have government be there to serve you, to do our proper regulatory role, but we’re not here to have a fee that justifies our existence as we grow and put that burden back on you.”

Haslam said as he looked around the room he noted a difference in the business people and some Cabinet members in Washington.

“Not many of those Cabinet secretaries had ever really had capital at risk in a business,” Haslam said. “If you’ve never had capital at risk, you don’t understand the burden of regulations.”

During the Washington conference, President Barack Obama told governors he did not think it did anyone any good when public employees are denigrated, a reference to the clash in some states over benefits for state workers. Given Tennessee’s current scrap between the Legislature and the TEA, which is more subdued than the friction in other states, Haslam was asked after the event if he felt state employees were being denigrated by moves on tenure and collective bargaining.

“I’ve made that point about teachers. This is not at all about pointing fingers at teachers. If it is, it is the wrong discussion, and it shouldn’t be about denigrating state employees,” Haslam said.

“Believe me, I have incredible appreciation for state employees. It does have to be, though, about looking at what the overall equitable answer is for taxpayers, for employees, and for providing services. You have to look at all those.”

Jim Brown, state director for the NFIB in Tennessee, expressed his approval of what Haslam and the legislative leaders who addressed the group are trying to accomplish, noting that a tort reform bill Haslam is pushing is important.

Brown also said he has been impressed so far in what he has seen in Haslam’s administrative leaders and said they are trying to reduce the amount of red tape businesses face.

“What we’re seeing from them is they are looking at existing rules and regulations that have frustrated small businesses and home builders,” Brown said.

“The process should not take long. It’s costly. It discourages investment. It discourages growth and discourages adding jobs. He’s saying let’s look at everything in a full top-to-bottom review. That’s not a sexy press release, but it’s important.”

Press Releases

Franklin Mayor Tapped for TDOT Post

Press release from Governor-elect Bill Haslam; Jan. 4, 2011:

NASHVILLE – Tennessee Governor-elect Bill Haslam today announced Franklin Mayor John Schroer as Commissioner of the Tennessee Department of Transportation.

Schroer was sworn in as Franklin Mayor in 2007, and is a member of the Middle Tennessee Metropolitan Planning Organization and the Regional Transit Authority.

Schroer spent a decade working in commercial real estate finance before starting his own development business. Prior to his election, he served on the Franklin Special School Board for 13 years, and he also has served on the board of the Tennessee School Board Association.

“As a mayor, John Schroer has knowledge of transportation issues at the ground level, and he’s shown himself to be someone who gets results,” Haslam said. “I’m grateful that he’s joining our team, and I believe Tennessee’s transportation system will be in good hands.”

The Transportation Department (TDOT) handles multiple transportation responsibilities including highways, aviation, public transit, waterways and railroads.

Schroer has a bachelor’s degree in business from Indiana University and an MBA from the University of Tennessee. He served previously on the Williamson County United Way board and was a founding board member of Franklin Tomorrow.

“I’m excited to be joining the outstanding team Gov.-elect Haslam has put together, and I’m honored and humbled by the choice,” Schroer said. “I’ve worked with TDOT previously, and I’m looking forward to begin working with the great staff at the department.”

Schroer, 59, is married to Marianne, and they have three grown children. They are members of Franklin First United Methodist Church.

For more information, please visit