gas tax

Some contrasting commentary on passage of gas tax bill

From Tea Party leader Judson Phillips, writing in Tennessee Star (excerpt):

The Tennessee Republican Party died on April 19, 2017. Ten years after the GOP became the majority party in Tennessee, led by a liberal governor, the party committed political suicide.

By voting for the largest tax increase in the history of the state of Tennessee, the Republicans in the state legislature knifed their base in the back and repudiated everything they claim to stand for. Tennessee Republicans routinely make campaign speeches talking about how conservative they are and how they believe in limited government.

Today, Tennessee’s conservative base knows this is a lie… Unfortunately, the Tennessee Republicans supermajority in the legislature chose to listen to a lame duck, feckless crap weasel governor instead of the people who put them in office.

From Gov. Bill Haslam

“The IMPROVE Act is the largest tax cut in Tennessee history, makes us more competitive as we’re recruiting manufacturing jobs and keeps our transportation network safe, reliable and debt-free for the next generation of Tennesseans. While there remains action to be taken on this legislation, I want to thank both chambers for their votes today on the IMPROVE Act, particularly Senate Majority Leader Mark Norris (R-Collierville) and Reps. Barry Doss (R-Leoma) and Bill Dunn (R-Knoxville) for their work carrying the legislation.”

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House approves gas tax bill 60-37; Senate approves 25-6

The House approved Gov. Bill Haslam’s tax package, including increases in gas and diesel fuel taxes, on a 60-37 vote Wednesday after more than four hours of debate.

The Senate followed shortly afterwards — with considerably less debate – on a 25-6 vote.

There are some minor differences on the bill, one clarifying effective dates on parts of the tax package, that must be resolved before it goes to the governor. But should occur quickly, clearing the way for work on the state budget next week.

In the House, there were 80 amendments to deal with. The latest governor-approved version of HB534 raises the gas tax by six cents per gallon and the diesel fuel tax by ten cents per gallon – phased in over a three-year period. That’s coupled with a cut in corporate taxes for manufacturers, a reduction on the state sales tax on groceries and a cut in the Hall income tax on investment income.

Rep. Barry Doss, R-Leoma, acted as sponsor on the House floor, successfully tabling a long list of hostile amendments while others were ultimately withdrawn. A key vote came on a proposal by Rep. David Hawk, R-Rogersville, to rewrite the governor’s bill to exclude both the tax increases and the tax cuts. The Hawk amendment would instead have diverted sales tax revenue from purchase of vehicles to the state’s highway fund.

Hawk’s amendment failed with 38 representatives supporting it, 58 opposed.

House Speaker Beth Harwell, eyeing a run for governor,  voted against the Haslam proposal when it first came under as an amendment, then voted for Hawk alternative plan. But she then voted yes on the final vote on the bill, as amended.

Excerpt from the AP’s report:

“While this was not the plan I preferred — I definitely preferred the other plan — at the end of the day infrastructure is a limited role of government and we need to perform it well,” Harwell told reporters after the vote.

The speaker said she doesn’t anticipate revived efforts to change the funding mechanism if the bill ends up in a conference committee to iron out differences.

…The House vote on the bill illustrated how closely divided the Republican supermajority is on the measure, with 37 members voting for and 35 voting against. Democrats voted 23-2 in favor of the amendment.

House roll call vote (cut and pasted from legislative website – which also has votes on amendments, parliamentary moves and such HERE if you click on ‘votes’ at the top right of the page.).

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Report: Poor TN road conditions cost drivers $6B

A national transportation research group says deterioration, congestion and lack of safety features on Tennessee roads and bridges cost the state’s drivers $6 billion annually, according to an AP brief summarizing the study.

The report by TRIP was released Tuesday, the day before a House floor vote on Gov. Bill Haslam’s plan to raise the gas tax for road improvements. The group says the $6 billion figure includes higher vehicle operating costs, traffic crashes and congestion-related delays.  

The report says the average extra cost to each driver annually is $2,019 in Memphis, $1,667 in Nashville, $1,471 in Chattanooga and $1,376 in Knoxville.

Note: The full report is HERE. TRIP bills itself as a nonprofit research organization “sponsored by insurance companies, equipment manufacturers, distributors and suppliers; businesses involved in highway and transit engineering and construction; labor unions; and organizations concerned with efficient and safe surface transportation.”

Study finds vehicle sales tax more volatile than fuel tax

The Sycamore Institute, founded in 2015 by former state Sen. Jim Bryson of Franklin (also the Republican nominee for governor in 2006) and billing itself as a “nonpartisan policy research center for Tennessee,” has issued a 20-year comparison of state fuel tax revenue and sales tax revenue from vehicle sales taxes.

The accompanying chart shows state sales taxes on vehicles dipped by nearly 20 percent during the 2008 recession. Fuel taxes dipped by about 5 percent during that time.

gas-tax-revenue-and-car-sales-in-tennessee

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Harwell to divided Republicans: ‘Be kind to each other’

With Gov. Bill Haslam’s gas tax bill scheduled to hit the House and Senate floors on Wednesday, GOP House Speaker Beth Harwell is urging divided fellow Republicans to “try to keep personalities out of it” during debate, reports the Times-Free Press.

“This will be a hard week,” Harwell told GOP Caucus members Monday. “We got big votes and I’m just asking y’all no matter how you come down on this — we’re going to have good Republicans for this bill, we’re going to have good Republicans against this bill — I’m asking you to be kind to each other.

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Gas tax maneuvers: Haslam targets 15 House votes; Harwell may flip-flop

House Speaker Beth Harwell, who last week declared her support for an alternative to Gov. Bill Haslam’s tax package proposal, now says she’s “leaning” toward support of the administration bill, reports the Times-Free Press.

The governor, meanwhile, has set up 20-minute private interviews with 15 legislators considered “on the fence” in voting for the bill, reports The Tennessee Star. There are 11 Republicans and four Democrats on the list of legislators getting an emailed invitation.

The House floor vote on Haslam’s bill is scheduled for Wednesday.

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Gas tax supporters buy $127K in radio ads

A group of associations backing Gov. Bill Haslam’s proposed IMPROVE Act is launching a statewide radio campaign with ads touting the legislation that raises fuel taxes for transportation while also cutting other taxes, reports the Times-Free Press.

With the legislation heading to the state House and Senate floor as early as next week, the Transportation Coalition of Tennessee plans to begin airing the 60-second spots starting Thursday, going through April 21. The $127,000 buy’s hits the Chattanooga, Jackson, Memphis, Nashville, Knoxville and Tri-Cities markets.

Dubbed the “It’s Smart” series, the ads say “it’s smart to support better roads, safe bridges and tax cuts.”

The organization’s news release is below.

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Haslam gas tax plan clears House Finance; no vote on Harwell alternative

Gov. Bill Haslam gas tax bill won approval of the House Finance Committee in a voice vote Tuesday after an alternative proposal promoted by House Speaker Beth Harwell was discussed, then shelved without a vote.

The Harwell alternative came in the form of an amendment sponsored by Rep. David Hawk, R-Greeneville, that would have diverted sales tax revenue from vehicle sales to the highway fund rather than the state’s general fund. Haslam’s bill (HB534) raises the gas tax by six cents per gallon and the diesel fuel tax by 10 cents per gallon over a three-year period. It also includes cuts to other taxes.

Further from The Tennessean:

The House finance committee’s approval of Haslam’s bill assures the measure could receive a vote on the House floor, barring any last minute legislative high jinks. (It’s already cleared for a Senate floor vote.)

… Rep. Gerald McCormick moved to reject Hawk’s proposal, which led the Greeneville Republican to withdraw his amendment.

McCormick said because Hawk’s amendment would have completely rewritten the bill, the committee should be leery of taking such action.

“I’m really afraid that we could make some serious mistakes doing that,” McCormick said.

Despite pulling back his amendment, Hawk vowed to continue to fight over the measure on the House floor.

“I will state that this issue is far from being done. We will have a conversation on the floor about how we need to better fund transportation and what is the most responsible way to do that as we serve our constituents,” Hawk said. “That’s a promise. We will have a debate on the floor and we will bring an amendment to the floor.”

24 big firms collectively save $57M per year under Haslam corporate tax break plans

Gov. Bill Haslam’s administration has calculated that one provision in the governor’s tax package would collectively give $113.8 million annually ib tax breaks to 518 Tennessee companies with just 24 big firms get more than half the benefits in corporate tax cuts, reports the Times-Free Press.

Haslam calls his tax package the IMPROVE Act; other supporters have begun calling it The Tax Cut Act of 2017. It increases gas and diesel fuel taxes while lowering the sales tax on groceries and some other levies – most notably a break for manufacturers in payments of franchise and excise taxes. The newspaper says it got a copy of the administration analysis, which has not been released publicly.

Twenty-four large manufacturers would see annual reductions of $1 million or more in their state franchise and excise taxes, according to the analysis obtained by the Times Free Press and verified by two legislative sources. Those tax breaks would account for $57.44 million, or 50.7 percent, of the total $113.3 million.

Another 145 companies would see tax cuts between $100,000 and $1 million, for a collective reduction of $47.95 million. All told, 93 percent of the proposed change, or $105.4 million, would go to companies that would save $100,000 or more. Some 349 smaller companies would share a $7.89 million reduction., according to the analysis.

Haslam said the manufacturers’ tax cut is aimed at encouraging existing companies to boost investment and new ones to locate to Tennessee by letting them choose the formula for calculating their franchise and excise tax burden.

…The analysis does not identify specific companies impacted. State law prohibits public disclosure of most taxpayer information.

Senate eyes recess while House tussels with taxes

State Senate leaders are considering a week’s recess in late April to let the House catch up in acting on legislation – most notably Gov. Bill Haslam’s tax package and the interrelated state budget for the next fiscal year.

And there’s more senatorial criticism of House Speaker Beth Harwell’s move to seek an alternative to the Haslam plan that does not include a gas tax increase.

The budget cannot be approved until the fate of Haslam’s tax plans is decided. Senators expect to approve their latest version, including gas and diesel fuel tax hikes, in Finance Committee next week, clearing it for a floor vote. Harwell, on the other hand, says she wants to instead propose an alternative to the Haslam plan next week.

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