Trump's idea of private financing for roads may hit pothole in debt-free Tennessee

NASHVILLE - Gov. Bill Haslam says he and President Donald Trump are "100 percent on the same page" for the need for new spending on crumbling or new transportation infrastructure, but he doesn't think fellow Republican Trump's idea for public/private partnerships to finance the work will help Tennessee for one simple reason.

Tennessee pays for its road maintenance, improvements and new construction without taking on debt and resulting interest payments by issuing bonds. It's strictly pay as you go.

"We would love it where it came along the line of traditional 'x' cents per gallon and our portion of that money would come back to the state," Haslam said this week of the president's approach. "So far I haven't heard anything like that."

Rather, the governor noted, "I've heard of a lot [about] infrastructure projects that took the form of public/private partnerships, which is just another form of debt which we don't do in Tennessee."

During his campaign, Trump called for massive transportation investments, with new expenditures ranging from $500 billion to $1 trillion. But now as president he has expressed a preference for attracting the money from the private sector through financial incentives.

Investors would bid on a project that they would build and maintain for a set period, recovering costs through tolls paid by motorists each time they use roads and bridges or state payments.

In the meantime, Haslam has embarked on an ambitious transportation plan of his own to address a $10.5 billion Tennessee backlog of nearly 1,000 projects. They range from interstate expansions and new interchanges to state highway improvements.

It has at its core a proposal to boost Tennessee's fuel taxes for the first time since 1989. The state's gas tax would rise by 7 cents to 28.4 cents per gallon while diesel would increase 12 cents to 30.4 cents. Haslam says inflation has eroded what was 28.4 cents per gallon nearly 38 years ago to about 11 cents because of inflation.

The governor's proposed fuel increase would raise $227.87 million while other measures including a $5 to $20 increase in vehicle registration fees depending on vehicle type, a $100 fee on electric vehicles, a 3 percent charge on rental cars and 15 cents per gallon tax on natural gas- fueled vehicles.

The total package would raise $278.5 million more per year for the state plus new revenue through tying increases every two years to the Consumer Price Index, a measure of inflation. Increases would be capped.

Tennessee's current $1.87 billion transportation budget relies on $1 billion from the federal government's own fuel taxes which are shared with states but haven't been increased in years.

"We agree there needs to be infrastructure work so the president and I are 100 percent on the same page," Haslam told reporters this week. "We would love it [a Trump proposal] if it was something that followed traditional revenue where states get 'x' percent of that revenue and we could count on that for our long term needs.

"So far," Haslam added, "we haven't heard anything along those lines."

At Trump's request, Tennessee has joined other states in forwarding a list of projects that are set to start if the money was available.

"I think their request to us was that can you us some examples of infrastructure projects that are ready to go - I don't want to use the old 'shovel ready' term - but projects that are ready to go," Haslam said. "So we forwarded those lists of big projects that we know we need and are ready to hit the ground running."

Tennessee has offered up seven projects totalling $1.1 billion.

If traditional federal revenue was forthcoming and the projects funded federally, Haslam said, "those could obviously come out of our project list."

Haslam's list includes U.S. 127 in Cumberland and Fentress counties north of Chattanooga. Planned improvements of the highway and bridges is projected at $159.4 million.

Other major projects on the state's list include:

- Alcoa Highway - Knox County/Blount County - $183.1 million

- Lamar Avenue - Memphis - $252 million

- I-440 - Nashville - $50 million

- State Route 109 - Wilson County - $18.5 million

- I-40 - Jackson - $66.3 million

- I-69 - Obion County - $236.7 million.