The Latest: Haslam critic likens gas tax plan to theft

Republican Gov. Bill Haslam speaks at the state Capitol in Nashville, Tenn., on Wednesday, Jan. 18, 2017, about his plan to boost transportation funding while also cutting taxes. Haslam's plan would hike gas taxes by 7 cents per gallon. (AP Photo/Erik Schelzig)

NASHVILLE, Tenn. (AP) - The Latest on Tennessee Gov. Bill Haslam's transportation proposal (all times local):

1 p.m.

The leader of the Tennessee chapter of Americans for Prosperity is speaking out against Republican Gov. Bill Haslam's transportation funding proposal that includes the state's first gas tax hike since 1989.

Andrew Ogles, the group's state director, likened it to "theft" for the governor to propose a tax hike while the state is running budget surpluses topping $1 billion. Ogles says he plans to propose his own plan to spend $2 billion on transportation needs over the next decade without raising any taxes.

Haslam is rejecting calls to tap into the state's surplus funds to pay for his transportation program, arguing that doing so would dedicate taxes paid only by Tennesseans to roads that also are used by out-of-state cars and trucks.

The governor proposes adding 7 cents to Tennessee's current 21.4-cent tax on each gallon of gas.

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12:45 p.m.

Nashville Mayor Megan Barry is lauding Republican Gov. Bill Haslam's proposal to allow cities to hold referendums on adding a sales tax surcharge to pay for mass transit projects.

Officials in the booming Nashville region have identified $6 billion in transit needs over the next 25 years.

Barry says she believes people in Nashville "are willing to pay for a mass transit system that meets the needs of our growing community."

The local-option proposal is part of Haslam's larger plan announced Wednesday to boost transportation funding in the state, largely through a 7-cent tax increase on each gallon of gasoline and 12-cents per gallon on diesel.

Tennessee's sales tax rate is 7 percent, while local governments can charge up to 2.75 percent more.

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11:15 a.m.

Republican Gov. Bill Haslam is proposing to raise Tennessee's tax on each gallon of gasoline by 7 cents while cutting the state's sales tax on groceries and income from earnings on stocks and bonds.

Haslam says average motorists would pay an extra $4 dollars more per month as part of his plan to generate $278 million annually in new money to pay for road projects around the state.

The governor says he would balance the gas tax increase with proposed cuts of $55 million in the sales tax on groceries, $113 million in corporate taxes for manufacturing companies and $102 million in the Hall tax on investment income.

Haslam also wants to tie the gas tax to inflation and let cities seek a sales tax surcharge to pay for transit projects.

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2 a.m.

Republican Gov. Bill Haslam is set to present his proposal to boost state road funding at a news conference.

The governor will make his plan public Wednesday at the state Capitol.

Haslam has acknowledged that any long-term road program to pay for the state's $6 billion transportation backlog will likely have to include the state's first gas tax increase since 1989. Lawmakers aren't expecting him to propose a hike of more than 7 to 9 cents per gallon on top of the current 21.4 cent tax.

Other proposals could include designating a sizable chunk of the state's more than $1 billion surplus for road projects, and giving cities and counties the power to charge an additional local tax to pay for transit projects.