NASHVILLE — As Republican Gov. Bill Haslam seeks to lay the groundwork for new transportation funding, one of his staunchest and most powerful GOP allies in the Legislature, House Speaker Beth Harwell, is steering toward a possible detour around any would-be tax hike.
Noting that Tennessee revenue collections have improved to the point of the state having a nearly half-billion-dollar surplus, Harwell said she believes some $400 million of the one-time money could be used for road projects.
"As we consider how to best serve the taxpayers, I believe we should consider using a significant portion of this one-time money to fund these projects," Harwell said last week in a statement.
The speaker said Tennessee is "fortunate to be a 'pay-as-we-go' state, meaning we do not go into debt for road projects. By utilizing this funding, we can continue that tradition of responsible fiscal management."
Harwell's comments are just one sign of resistance to any hike in fuel taxes, which many Republicans fear will go down with constituents about as well as anti-freeze in a gas tank.
Asked about the speaker's comments, Haslam said, "When you have a surplus everybody has an idea for how to spend that. And so my approach is always you be really thoughtful, you look at the wide variety of needs we have from deferred maintenance on buildings. I can make a really long list of things that might be appropriate. I'd say let's use the normal budget process."
Haslam also made a second point.
"[A] one-time fix, a one-time spot of money really doesn't solve our issue," Haslam told reporters. "We have a long-term, multi-year, multi-billion dollar problem and we're going to have to address that at some point in time."
That's why, the governor said, he plans to travel the state later this summer and make the case to Tennesseans for more money. The state's $1.81 billion transportation program, which derives funding from dedicated gas and diesel taxes, is at a virtual standstill when it comes to making progress, he said.
About $960 million in the transportation budget comes from Uncle Sam. But for years, Congress has been stalled over addressing long-term needs with the state actually getting less money.
Haslam said he intends to show "what the needs are, here are the projects that haven't happened, here's how long that project's been in the queue and here's how long that project will stay in the queue and here's the dollars involved."
Transportation figures show that Harwell's idea to use $400 million in one-time surpluses won't travel far in terms of total state road, bridge and other transportation needs.
In Hamilton County alone, seven projects on the project list total $423 million.
If Harwell stays in her lane on fuel tax or other increases for transportation — there's a big list of options including higher vehicle registration fees, charges for electric vehicles and more — it won't be the first time the powerful speaker has recently parted ways with her ally.
Last session, Harwell, who hasn't ruled out a 2018 race to succeed the term-limited Haslam, didn't get behind the governor's Insure Tennessee proposal. It would have used federal dollars to extend Medicaid coverage to an estimated 280,000 low-income Tennesseans in a more market-style structure.
Neither did a number of fellow Republicans and the governor's plan belly-flopped twice in Republican-controlled Senate committees.
Now the gas tax issue is creating problems not just for Harwell but some other Republicans as well.
The powerful Tennessee Road Builders lobby is staunchly in favor of doing something as are a number of business and local government organizations. But at the same time, Americans for Prosperity's Tennessee chapter and some others are vehemently opposed and say the state should use surpluses or general fund revenues for transportation issues. Tennessee has used specially dedicated fuel taxes to fund roads for nearly a century.
AFP-Tennessee's president, Andrew Ogles, is undertaking his own road trip in opposition to any increases.
House Majority Leader Gerald McCormick, R-Chattanooga, another Haslam ally who did back him on Insure Tennessee, recently drew headlines when he floated a trial balloon saying some colleagues might discuss issuing bonds for transportation funding.
But as Harwell, the governor and several Republican senators point out, Tennessee doesn't do that and pays for projects as it goes.
Tennessee last raised its gas tax 27 years ago — back in 1988 — and the charge on diesel, which primarily hits truckers, was last raised in 1989. Motorists in the Volunteer State currently pay 21.4 cents in state taxes per gallon on gas and 18.4 cents on diesel fuel. Federal fuel taxes of 18.4 cents and 24.4 cents, respectively.
A number of states have taken action to boost revenues, among them Georgia.
In March, the Georgia Legislature boosted that state's gas tax and raised other fees to generate nearly $1 billion more for road projects.
Addressing his Chamber of Commerce last month, Tennessee Republican Lt. Gov. Ron Ramsey, the Senate speaker, said something needed to be done, the Kingsport Times-News reported.
Ramsey, who is from Blountville, pointed out that gas taxes haven't kept up with fuel-efficient vehicles mandated by tougher federal fuel standards.
He cited his own new sport utility vehicle as an example, saying it gets far better mileage than his old 2007 model.
The speaker said he's now getting 28 miles per gallon. "So I'm paying less than half (the tax) than I was for the same number of miles. We're not keeping up with technology That's the problem."
"Why does government have to always be in a crisis before we address something?" he asked, the Kingsport Times-News reported. "We're not in a crisis now. That's not going to be the case three years from now."
Asked whether Harwell's comments had caught him by surprise, Haslam said the House speaker "has been a terrific partner for us since we came in and will continue to be. She's the elected speaker of the House. She has the right to say here's what I think should happen with the budget.
"Again, I think our response was — as the people who prepare the budget — to do the ground work and the homework to make certain we thought about all the needs of the state and are we really coming up with long-term solutions."
Contact Andy Sher at email@example.com or 615-255-0550.