NASHVILLE, Tenn. (AP) – Republican Gov. Bill Haslam is scheduled to unveil his top legislative priority on Wednesday as state lawmakers await details on his plan to boost transportation funding in Tennessee.
Lawmakers are largely sympathetic to Haslam’s arguments that the state’s $6 billion road project backlog needs to be addressed, but many are wary about committing to the state’s first gas tax hike since 1989 – especially with a budget surplus exceeding $1 billion.
Haslam told reporters last week that he was finalizing a plan that would address the state’s transportation needs in the long term, “but also is something that can pass, to be blunt.”
“The best plan in the world isn’t any good if it can’t pass,” Haslam said.
The governor has acknowledged that legislators want to see an equivalent tax cut in the general fund if the tax on gasoline is hiked, but he has cautioned against hurting the state’s financial situation in the event of an economic downturn in the future. Haslam also stresses that the state has cut $270 million in taxes since he took office in 2011.
Haslam is keen to avoid the pitfalls of his Insure Tennessee that failed in 2015 when he couldn’t secure the support of key Republican legislative leaders like House Speaker Beth Harwell of Nashville and Senate Majority Leader Mark Norris of Collierville. Both are considering bids to succeed the term-limited governor next year.
Harwell said she’s “supportive of us looking at what needs to be done” on transportation needs, but indicated she will expect the governor’s plan to include commensurate tax cut.
“This General Assembly does not take raising taxes lightly,” Harwell said. “So I predict that if we look at increasing the user tax on gas, we will also look at lowering a tax somewhere else.”
Norris said a compelling argument can be made for the need to ensure that the state’s 20,000 bridges are in good repair. The state has about 900 pending bridge projects, and up to two-thirds of those spans are considered dangerous, he said.
“I think there will be one-time dollars directed toward infrastructure and transportation,” Norris said. “The governor is just committed to tweaking that gas tax as well, so that’s going to be a component of what’s discussed.
“We haven’t reached an agreement on it, but I’m optimistic that we’ll have a robust debate,” he said.
Rep. Gerald McCormick, a Chattanooga Republican who has been a vocal opponent of any increase in the gas tax, has been named chairman of the powerful House Finance Subcommittee after stepping down as majority leader before this session.
McCormick said he’d want to see the governor propose a cut in the sales tax to go along with a gas tax increase, “so that the poor people can get the tax breaks just as the rich people.”
Most of the tax cuts during the Haslam administration have benefited wealthier Tennesseans, like the phasing out the tax on income from stocks and bonds and the elimination of inheritance and gift taxes. Early in Haslam’s first term, he also cut the sales tax on groceries from 5.5 percent to 5 percent.
McCormick said he won’t seek to become a roadblock to Haslam’s transportation plan.
“I’m not looking to sabotage it or anything like that,” he said. “But again I think the burden should fall on the governor.”
The state chapter of Americans for Prosperity, a familiar Haslam foe from the Insure Tennessee debate, is expected to take a prominent role in the gas tax debate. Andrew Ogles, the group’s state director, has pledged to keep an open mind about the governor’s proposal, but questioned the need to for a tax hike when the state is flush with cash.
“I believe in funding our roads, but we don’t have to do it in such a way that we raise taxes,” he said.
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