Governor Haslam proposes 7-cent tax increase on gas tax; rolls out parts of 2017 agenda

NASHVILLE, TN (WKRN/WJHL) – Governor Bill Haslam has plans to raise the state’s gas tax by 7 cents and implement new transportation fees, while cutting business, grocery and personal investment taxes.

Haslam revealed the sweeping proposals at the state capitol Wednesday morning. Many of these proposals are said to have been in the works for several years.

Haslam says the gas tax increase is needed to help pay for the state’s $6 billion transportation backlog. If passed this would be the state’s first gas tax hike since 1989.

The proposed gas tax is aimed at getting needed road projects, totaling nearly $11 billion. The projects potentially rolling out in the next several years instead of waiting potentially decades.
Governor Haslam Transportation Plan

If passed this year by lawmakers,  drivers would see the seven-cent jump at the pump beginning July 1. In addition, truckers would pay an extra 12 cents per gallon.

Car registration fees would also go up by $5 dollars for the average car and a $100 yearly fee would be placed on electric cars and vehicles using alternative fuels.

Rental cars would also be subject to a 3-percent additional charge.

There is a push to pass an open container law in Tennessee which would prohibit anyone in a vehicle from drinking. This move would allow an additional $18 million in federal highway funds.

See also: Sen. Lundberg hopes open container bill passes this year

Those numbers come as Gov. Haslam detailed a business tax cut plan aimed at manufacturing companies who have a large presence and “make stuff in Tennessee.” It would save them $113 million annually.

The state’s sales tax on groceries would also be cut from 5% to 4.5%.

The final tax cutting part of the overall proposal includes additional decreases of one and a half percent to the state’s Hall Tax on personal stocks and dividends.

Governor Haslam says the state is poised for continued growth. He touts the state has cut $270 million in taxes since he took office in 2011.

We’re told that additional pieces of the legislative agenda will be announced in the coming weeks.

Haslam is scheduled to deliver a State of the State address on January 30.

See also: Haslam to unveil Tennessee transportation plan Wednesday 

 

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