Haslam transportation plan clears Senate panel short a load of funding

Haslam transportation plan clears Senate panel short a load of funding

March 7th, 2017 by Andy Sher in Breaking News

NASHVILLE - A Senate Transportation subcommittee unanimously approved Gov. Bill Haslam's proposed road improvement plan but without his recommended gas and diesel tax increases to fund it.

In fact, the Senate version of the Republican governor's proposed IMPROVE Act also doesn't include his recommended cuts in non-highway taxes that are supposed to have a revenue neutral impact on the state's overall budget.

Both the 7 cents per gallon gas tax increase and 12 cents on diesel were removed with the issue to be resolved either next week by the full Transportation Committee or perhaps even later down the road in the Finance Committee, said Sen. Jim Tracy, R-Shelbyville.

Also gone were the corresponding $270 million in cuts to the state's sales tax on food, corporate manufacturers and the acceleration of the previously approved phase out of the Hall Income Tax on personal filers' interest and dividend income.

Instead, the panel acted on only on approving the 962 backlogged projects totalling $10.5 billion that Haslam is seeking funding for.

"Just the needs," Tracy told reporters after the subcommittee approved the bill on a 5-0 vote. "This is all the projects across the state. It did not include any of the tax cuts or any of the taxes [increases]. This is just the need."

Tracy said discussions on what taxes should be cut is continuing. 

The full House Transportation Committee is scheduled to take up the lower chamber's companion bill later today.

Haslam's bill finally emerged from the House Transportation Subcommittee last week on a tie vote which bypassed the governor's proposed fuel taxes and instead took a funding mechanism from a rival bill. 

As a result, the amended House bill would devote a quarter percentage point of Tennessee's existing 7 percent sales tax to provide road funding.

Haslam's proposed fuel tax increases would raise an estimated $227.8 million while other measures, including increased vehicle registration fees and a new $100 fee on electric vehicles would bring the total new revenue for the state to $278.5 million.

The governor's plan would also bring in an additional $117.34 million to Tennessee cities and counties' local road projects.