Haslam Ally Says There’s No Chance Of Raising Gas Tax Next Year

A top ally of Bill Haslam is telling Tennessee’s governor to forget about increasing the state’s gas tax next year.

Before he launched this month’s tour of the state, during which he’s trying to drum up support for putting more money into highways, Haslam floated the possibility of an eventual increase to the state’s 21.4 cents-a-gallon tax. The rate hasn’t been raised since 1989, and Haslam believes revenues from the tax can’t keep pace with the wear and tear on Tennessee’s roads.

Senate Majority Leader Mark Norris has joined the governor on the tour, appearing with him in Memphis, and he agrees that a new funding plan is needed for Tennessee roads. But he says he’s told Haslam not to try to push through an increase when lawmakers return for the next legislative session in January.

“We don’t support it,” Norris said. “He can (make an attempt), but last time I checked, leadership does not support that approach at this time, and he knows that.”

“We do support his traveling the state to engage in this conversation.”

Tennessee is one of the few states that doesn’t borrow to pay for highway construction and maintenance. Instead it pays-as-it-goes, dedicating revenues from the gas tax to a special highway fund.

The tax still generates more than $800 million a year. But as Tennesseans have switched to more fuel-efficient vehicles, annual gas-tax revenues have fallen behind the pace of inflation. And as a whole, Tennesseans are driving more miles than ever.

Many lawmakers, including Norris, recognize the challenge. But they say 
the governor should first use some of this year’s tax surplus to pay
back a longstanding IOU owed to the highway
fund. 

The state borrowed $280 million from the fund between 2001 and 2007. Norris and others say putting the money back would help the state clear some of its project backlog.

But, they add, a one-time injection of money isn’t going to solve any of the highway fund’s long-term problems.