“Gas Tax” bill passes Tennessee General Assembly

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Rep. David Hawk attempts to convince House members to accept a different plan for TDOT funding in lieu of the IMPROVE Act.

This afternoon the Tennessee House and Senate approved the IMPROVE Act in today’s floor sessions. The bill aimed at addressing roads and bridges maintenance and construction was passed the House 61-35 and passed the Senate 25-6. Both House members representing Marion County, Reps. David Alexander and Rick Tillis, voted in favor of the bill. Senator Janice Bowling, Marion County’s state senator, voted against the measure. Supporters of the bill extol the net affect of the bill as a reduction in taxes. Opponents of the bill remain skeptical of raising any taxes in light of a state treasury surplus.

Governor Bill Haslam introduced the IMPROVE Act in his State of State address in January. The proposal called for an increase in the fuel tax to fund Tennessee Department of Transportation (TDOT) projects to improve infrastructure in the state. Haslam, and advocates of the bill, tout the fact that the state has not modified the gas tax in over 20 years. The legislation increases the fuel tax by six cents a gallon for regular gas while increase diesel fourteen cents per gallon. Rep. Barry Doss of Leoma, TN assumed most of the heavy lifting of the Glen Casada bill to keep the bill intact for the governor. Casada’s original bill, HB0534, was broad in its scope only calling for the replacement of a clause in the Tennessee Code Annotated (TCA) dealing with commercial vehicle logs. The one page proposed legislation was then amended with a 98 page amendment shortly after bill introduction which contained the substance of the IMPROVE Act.

Opponents of the bill say that there is not a revenue shortfall, but an allocation problem. Representative David Hawk of Greenville repeatedly has stood in opposition to the plan. Hawk has been the face of opposition camp to increasing taxes throughout the legislation’s committee path. Hawk proposed an amendment on the floor again today stripping the bill and allocating the sales tax on automobiles to TDOT’s budget which, by his calculations, would generate more revenue than the proposed gas tax increase. The amendment failed on the floor today. Reps. Jeremy Faison and Andy Holt also were public opponents of the bill. Senator Bowling said, “I supported the Hawk Plan… transportation funding with no tax increase. It had the support of a majority of the House republicans. It failed. I voted against the Haslam tax increase. It passed 25 to 6 in the Senate. I did not think it was a necessary tax or a sustainable revenue stream.”

Advocates for the bill claim the complexity of the bill, which includes stipulations for franchise and excise taxes, Hall tax components, grocery tax implications and other, seemingly, unrelated issues, was part of a plan to assure the legislation would be revenue neutral to Tennesseans. Opponents claim the components were thrown on the original bill in an effort to confuse the net revenue calculations. For instance, issues as simple as the increase in diesel fuel would simply be passed on to the consumer which would be a “double hit” to everyday Tennesseans. Claims that the other tax reductions only affected, at best 15 percent, of state residents made the tax breaks eligible for the higher income Tennesseans on the financial backs of the low to mid income wage earners.

The measure is headed to Governor Haslam’s desk less one House vote to reconcile a Senate amendment which addresses veteran’s income tax.