Tennessee conservative group waits on Haslam gas tax proposal before passing judgment

Gov. Bill Haslam speaks to reporters in Nashville, Tenn., on Wednesday, Nov. 9, 2016, about the presidential election results. (AP Photo/Erik Schelzig)

NASHVILLE - The head of a statewide conservative group who criticized Gov. Bill Haslam's first foray into new transportation funding in 2015 says he wants to see the Republican governor's actual plan before deciding if the organization will fight its expected recommendation for a gas tax increase.

Andrew Ogles, president of the Tennessee chapter of the national Americans for Prosperity, said that, at this point, "I don't want to jump to any conclusions."

Ogles said that given the state's nearly $1.9 billion revenue surplus in non-fuel tax areas like sales and corporate taxes which fund most other areas of government - almost $1 billion of it is in one-time money - he wants to get an overall picture of what Haslam wants the GOP-dominated Legislature to do.

"I think what we need to see is what is the spending plan, how are you going to use those dollars," Ogles said last week as members of the new 110th General Assembly completed their organizational session. "And then, at a time like this, this is when you look at ways to cut taxes versus raise them."

Top legislative leaders are already saying any gas and diesel increases sought by Haslam need to be accompanied by corresponding cuts in other areas such as the sales tax, corporate franchise and excise taxes and/or other areas.

"So I don't want to jump to any conclusions," said Ogles, whose deep-pocketed group in 2015 helped successfully frame opposition through radio attack ads criticizing Haslam's proposed Medicaid expansion, called Insure Tennessee, as well as several Republican lawmakers it viewed as supportive of it.

AFP-Tennessee's parent organization is the highly influential Americans for Prosperity, founded by conservative billionaire brothers Charles and David Koch. The group advocates for low taxes and less government involvement.

Ogles noted he spoke with Haslam on Wednesday night about fuel taxes and the budget, describing it as "a very, very good conversation.

"But again, we want to give him that courtesy, let him present his plan," Ogles added. "We'll look at the details. And then we'll make recommendations to the administration, the governor, and see if we can't come to kind of an agreeable solution that protects hard-working families."

Still, he noted "ultimately, the people in the rural communities bear the brunt of the gas tax because they travel the furthest. Our veterans are driving to VA hospitals."

Earlier, Ogles said "negative" when jokingly asked if he was all in for increases in fuel taxes. Tennessee last raised its gas and diesel taxes more than a quarter century ago in 1989. The current rates are 21.4 cents per gallon for gas and 18.4 cents on a gallon of diesel.

A state comptroller's report last year says the purchasing power of the tax, which includes 1.4 cents per gallon for regulation of pumps and environmental purposes, has gone down substantially over the last 27 years. The 20 cents on the gallon for transportation passed in 1989 was effectively worth just 11 cents in 2013.

At the same time, Haslam argues there's a $6 billion backlog in previously approved road projects, including in Hamilton County, and billions more in needs that can't jump off the preliminary planning page.

After the failure of his Insure Tennessee proposal in the 2015 legislative session, the governor that summer turned his attention to transportation funding, traveling across the state to define state needs but refusing to even say how he planned to address it. But he later conceded it would require fuel-tax increases to happen.

Americans for Prosperity-Tennessee quickly came out in opposition in 2015. Lawmakers, meanwhile, told the governor they wouldn't welcome any funding proposal during their annual session in 2016, it being an election year.

Now the elections are over and there is the governor's expected recommendation on fuel taxes and the corresponding calls for cuts in other taxes, given the surplus.

"I think there are a number of proposals out there that will meander their way through the committee process," said Senate Finance Committee Chairman Bo Watson, R-Hixson, adding, "at this point, most members are going to wait and see what the governor ends up proposing because, as you know, the adage goes the governor proposes and the Legislature disposes."

"I think we'll see what of those issues the governor has in his own budget," noted Watson, who was named to head the powerful committee last week. "And at the end of course, then the two chambers independently of each other will craft their response."

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow him on Twitter @AndySher1.