Cooper: Haslam's gas tax in gun sight

Tennessee Gov. Bill Haslam has revealed his gas tax proposal to legislators and the public.
Tennessee Gov. Bill Haslam has revealed his gas tax proposal to legislators and the public.

Tennessee Gov. Bill Haslam deserves credit for going first. However, the last time he made such a controversial proposal, it didn't work out so well for his side.

In 2015 it was Insure Tennessee, a pilot program that would have accessed federal dollars to pay for a health care program that offered to fill in the gap for many state residents who were otherwise unable to get health insurance. As a two-year pilot program, we supported its outline. Unfortunately, it died in committee and has not been resurrected.

Now it is a seven-cent hike in the state gasoline tax. The hikes, which also include a 12-cent rise in diesel fuel tax and would be the first since 1989, would be largely offset by cuts in other taxes. The comprehensive proposal is called the IMPROVE (Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy) Act.

Haslam made his proposal in Nashville with a number of legislators on hand Wednesday. The revenue from such taxes would help provide $278 million in additional funding to combat a backlog in road maintenance and pay for new road construction. It would be offset by some $270 million cuts in taxes used to fund other state operations.

Let's face it. Nobody wants to pay more taxes, and everybody wants better roads. But what paid for better roads in 1989 hardly pays the same freight today.

Yet, many will say, the state finished the year with nearly a billion dollar surplus. Why is there a need to raise taxes?

Maybe there's not a need at all. Maybe there's not a need for the full 7-cents-per-gallon rise. Maybe there are other ways to pay for it.

Legislators will hash it out over the next few months, but a number of facts can't be disputed.

* The state has an estimated $6 billion backlog of previously approved projects and $4 billion of needs that would take decades to fund under the current structure.

* The 1989 tax of 21.4 cents-per-gallon has been reduced by 28 years of inflation and is now worth around 11 cents.

* The cost of materials with which to build roads has soared.

More importantly, even if a portion of the surplus were devoted to road, highway and bridge projects, the surplus is not a recurring amount. The state, fortunately, has had several financially good years in a row. That will not always be the case. In lean years, budgets will have to be trimmed, which doesn't bode well if that's how transportation projects are expected to be funded.

We believe Haslam, who began making the case for additional revenue for transportation projects two years ago, has demonstrated the need. The question for us, as it will be for the legislature, is the funding end.

The governor and his closest advisers have undoubtedly considered the options. And they have crafted a plan that doesn't put the full brunt of the increased revenue on gasoline users. In addition to gas and diesel users, electric car owners would pay a $100 fee, car registration fees would climb $5 for the average passenger car and $3 would be added to rental car fees.

Could there be better ways? The Tennessee chapter of Americans for Prosperity says there are and that they will produce one that raises $2 billion for roads over the next 10 years without a tax increase.

Legislators will be interested in that and are likely to have their own ideas as well. Not surprisingly, many already like the governor's tax cuts end of the proposal.

That plan reduces the current 5 percent sales tax on grocery store food purchases by .05 percent, accelerates the already approved phase-out of the Hall Income Tax on interest and dividends, and readjusts corporate taxes to accommodate major manufacturers and make the state more attractive to new companies.

A 2016 survey by 24/7 Wall St. of statistics from the Federal Highway Administration says Tennessee's roads are the fourth best in the nation. The state, according to the figures, has the fourth lowest percentage of public roads in poor condition (5.9 percent), the fifth lowest added vehicle cost ($182 per motorist) and the 14th lowest percentage of deficient bridges (19.7 percent).

This page has never been a fan of higher taxes, but we're clear about the need for more revenue to keep state roads in peak condition and fund the changes that are needed. Desirous of examining what else might be brought to the table, we're not ready to back Haslam's plan just yet. But we appreciate his thorough approach and will be interested to see what shakes out.

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