NASHVILLE - After two weeks of delay and open confrontation, a key Tennessee House panel this afternoon approved an amended version of Gov. Bill Haslam's proposed roads bill, complete with a 6 cent per gallon tax increase for gas, 10 cents on diesel and a 20 percent reduction in the state's 5 percent sales tax on food.
The full Transportation Committee's 11-7 vote came following an often-heated 90-minute debate in which some hard-right majority Republicans joined with Democrats in attacking portions of the plan.
Some GOP members wanted to avoid raising fuel taxes and instead break long-standing state tradition and divert existing sales tax revenues into Tennessee interstates, highways and bridge improvements and maintenance.
Minority Democrats, meanwhile, blasted Republicans' inclusion of tax cuts for corporate manufacturers and payers of the state's Hall Income Tax on interest and dividends, saying they wanted further sales tax cuts on food and chargig Haslam, Senate Republicans and House Republicans with favoring the rich instead.
Earlier, the GOP-controlled panel shot down a proposed Republican amendment that sought to divert existing funds from sales tax proceeds on vehicles sales to cover some $376 million for transportation and thus avoid increasing the gas by 6 cents to 27.4 cents per gallon and diesel by 10 cents to 28.4 cents per gallon.
It failed on an 8-10 vote.
Members than plucked whole the provisions of Haslam's proposed IMPROVE ACt now cruising through the Senate. That includes the 6 cent gas tax increase and 10 cents diesel, which would be phased in over three years and cutting the sales tax on groceries from 5 percent to 4 percent.
The grocery tax cut would take effect July 1 if the bill passes.
Other provisions include Haslam's originally proposed reduction of corporate taxes on manufacturers as well as reducing the Hall Income Tax on interest and dividends by 1 percentage point instead of Haslam's recommended 1.5 percentage points.
Another House provision would increase state property tax relief for veterans and the elderly to a higher degree than the Senate version now does. Neither was in Haslam's original bill.
House Transportation Committee members also approved an additional amendment that would repeal the fuel tax increase in the event Congress votes to increase federal fuel taxes.
And they shot down an attempt by bill critic Rep. Timothy Hill, R-Blountville, who sought to divide the question on the bill.
The legislation now goes to the House State Government Committee. Earlier today, the Senate State and Local Government Committee approved their version of the legislation, which Haslam calls the IMPROVE Act.
The bill as it now stands would raise an estimated $250 million for Tennessee transportation officials to help tackle an estimated $10.5 billion backlog of 962 interstate, highway and bridge projects.
Cities and counties would respectively see $35 million and $70 million. Both the state and local governments' increased revenues would be less than under Haslam's originally proposed gas tax increase of 7 cents and 12 cents on diesel.