Tennessee political leaders put off gas tax talk despite needs

Tennessee Gov. Bill Haslam speaks to the Tennessee Press Association in Nashville in this Feb. 4, 2015, file photo.
Tennessee Gov. Bill Haslam speaks to the Tennessee Press Association in Nashville in this Feb. 4, 2015, file photo.

NASHVILLE - While political leaders in Tennessee agree on the growing need to bolster funding for road building and maintenance, there is little consensus about how go about doing it.

Tennessee's 21.4-cents-per-gallon gas tax hasn't been raised in 25 years, and a recent study by the state comptroller found the state's fuel taxes are insufficient to maintain existing infrastructure and meet long-term transportation needs.

And while Republican Gov. Bill Haslam recently acknowledged that "we need to do something on the gas tax," he has indicated he won't introduce any legislation on the subject this year.

"We're not there yet in terms of being able to make that case in terms of something that's more than a Band-Aid on the funding side," Haslam said recently.

The governor said he instead wants to spend a year developing a comprehensive plan that would lay out "specifically what would happen over the next 10 years that wouldn't happen without it."

Figures compiled by The Associated Press show the total amount of money available to states from the Federal Highway Trust Fund has declined 3.5 percent during the five-year period ending in 2013, the latest year for which numbers were available. During that span, the amount of inflation-adjusted federal highway money dropped in all states but Alaska and New York.

Tennessee's share of Federal Highway Trust Fund went from $110 per capita in 2003, to $145 in 2008 and back down to $132 in 2013.

In 2008, Tennessee's combined state and federal funding for highway spending was the lowest in the country at $283 per person. That spending rate increased to $337 per person in 2013, but was still sixth-lowest in the country. By contrast, 26 states spent more than $500 per person on highways that year.

Adjusted for inflation, the total state and federal highway spending in Tennessee increased by just 4 percent between 2003 and 2013.

State Comptroller Justin P. Wilson's study found several options for increasing revenues for transportation projects. They include:

Increasing the state gas tax.

Tying the fuel tax to inflation or the price of fuel.

Charging sales taxes on gas purchases.

Paying for road projects out of the general fund.

Issuing bonds to pay to road projects.

Seeking private funding.

Allowing local governments to levy taxes for transportation projects.

Wilson said his office is only identifying potential solutions, and doesn't have any specific recommendations about which ones to take up.

"I think there's an acknowledgment of the issue, and I think it's widespread in the General Assembly," Wilson said. "But we have yet to coalesce around a solution."

Wilson said it will always be problematic for policies mulling tax increases.

"Anytime you're talking about revenue, the politics are tricky," he said.

And it's unclear whether waiting a year will ease political concerns as all House seats and half of the Senate seats are up for election in 2016.

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