Haslam’s gas-tax increase proposal leads to growing bipartisan discussion about tax fairness

Plastic bags covering gas pumps informs customers of a gas outage at a station in Alabaster, Ala., on Monday, Sept. 19, 2016, Alabama Gov. Robert Bentley issued a state of emergency after a pipeline spill near Helena, Ala. Gas prices spiked and drivers found "out of service" bags covering pumps as the gas shortage in the South rolled into the work week, raising fears that the disruptions could become more widespread. (AP Photo/Brynn Anderson) Plastic bags covering gas pumps informs customers of a gas outage at a station in Alabaster, Ala., on Monday, Sept. 19, 2016, Alabama Gov. Robert Bentley issued a state of emergency after a pipeline spill near Helena, Ala. Gas prices spiked and drivers found "out of service" bags covering pumps as the gas shortage in the South rolled into the work week, raising fears that the disruptions could become more widespread. (AP Photo/Brynn Anderson)

By Andy Sher February 25, 2017 5 min read

Haslam’s gas tax plan

Proposal: Hike gasoline and other vehicle-related taxes to raise $278.5 million a year for highway and bridge construction and improvementHow much: 7 cents for gasoline, 12 cents for diesel, $5 to $20 increase in registration fees, $100 fee on electric vehicles and new tax on natural-gas fueled vehiclesWhat for: Backlog of nearly 1,000 bridge and highway improvements worth $6 billion plus funding for new projectsLocal share: $78 million for counties, $39 million for citiesSource: Governor’s office

NASHVILLE – As he seeks additional money for roads through proposed increases on fuel taxes, Republican Gov. Bill Haslam is discovering he’s also started an increasingly bipartisan and populist conversation about tax fairness in Tennessee.

The Republican governor’s IMPROVE Act seeks to raise the tax on gas and diesel to help the state tackle a projected backlog of $10.5 billion in highway and bridge projects.

That and other increases in areas such as vehicle registration fees brings the total increases for the dedicated highway fund up to $278.5 million annually.

At the same time, recognizing that the state has huge surpluses in non-highway taxes that support general government functions like education and prisons, Haslam has proposed cutting three taxes by $270 million, including reducing the state’s 5 percent sales tax on food by a half percentage point or $55 million.