NASHVILLE - Republican Gov. Bill Haslam's proposed gas tax increases for roads won approval from the House Finance Committee this afternoon after the issue was tied up for for several hours by a rival plan offered up from GOP House Speaker Beth Harwell and allies which sought to substitute an alternative no-tax increase solution.
Sensing the prevailing winds blowing against him, Assistant Majority Leader David Hawk, R-Greeneville, withdrew his and Harwell's amendment, which sought to use existing sales tax revenue from sales of new and used vehicles to pay for the governor's IMPROVE Act.
But Hawk warned the amendment will be offered and discussed on the floor.
Earlier, there was confusion over whether Harwell had been working on yet a second alternative which the speaker's office later stated was not the case.
Haslam's plan, as amended by the Republican-controlled House and Senate versions, seeks to raise gas taxes by six cents per gallon and diesel by ten cents over a three-year period while also increasing vehicle registration fees and several other fees.
It seeks to raise an estimated $350 million that Haslam says is needed to begin tackling a $10.5 billion backlog of interstate, highway and bridge projects. The bill also provides new funds for cities and counties.
A key feature of the plan is cutting several general fund taxes where unlike the highway fund, revenues have flourished, creating an estimated $1 billion budget surplus and considerable angst among Republicans that's rolled downhill on Haslam.
So the IMPROVE Act also cuts the state's sales tax on food by $125 million, makes a $113 million change in state corporate tax provisions to help manufacturers and cuts the Hall Income Tax, which lawmakes approved phasing out last year, by a percentage point at a cost of $55 million.
The gas and diesel tax increases, the first since 1989, has generated consider political problems for Harwell, who plans to run in 2018 to succeed Haslam and hopes to have a record in which Republicans only cut and did not raise taxes.
Much of Haslam's tax cuts came about by Senate Republicans' moves, including Majority Leader Mark Norris, R-Collierville, who is seriously eyeing his own 2018 GOP primary bid for governor
The amended IMPROVE Act now goes to the House's Calendar and Rules Committee, it's last stopping place before it hits the House floor.