Democrat gets ahead of Haslam in proposing gas tax increase (plus mass transit funding)

Democratic state Rep. John Clemmons of Nashville has gotten ahead of Gov. Bill Haslam gotten ahead of Republican Gov. Bill Haslam in proposing a plan for raising Tennessee’s fuel taxes, reports the Nashville Post. His draft legislation includes a new stream of revenue for mass transit – something he thinks Haslam will omit.

Haslam, of course, has been pitching the general idea of revenue enhancement to build and better maintain roads for two years and is expected to finally roll out a proposal by Jan. 30.

“I’m trying to avoid rural versus urban antagonism,” Clemmons says. “With a separate funding stream for transit in cities that doesn’t compete in any way with funding projects for roads, bridges or tunnels in other parts of the state, it’s a win-win for all sides.”

Clemmons says his proposal is similar to funding models being used in North Carolina, Georgia and Texas — states with Republican-controlled legislatures, lots of rural counties with real road problems, and similarly booming cities with massive traffic issues.

…The legislator doesn’t have numbers yet set in stone, but the plan as he has drafted it so far looks something like this. The current “pay as you go” system that funds the Tennessee Department of Transportation remains in place, with about a 10-cent increase in the gas tax and an increase in the diesel gas tax to 23.95 cents, up from 18.40 cents… These increases would be indexed to account for population growth and inflation, meaning that in future years they would automatically increase or decrease as the numbers dictated — i.e., never again would the state be in the situation it currently faces, in which the taxes haven’t been increased in almost 30 years — and never again would the Legislature have to vote to raise the gas taxes.

The second arm of the program would create a new account within TDOT with funds dedicated to funding alternative forms of transportation (i.e., mass transit). Once the state hits a certain point in sales tax revenue, a certain number of dollars would automatically be directed into the fund. Similarly, all motor vehicle sales tax revenue over a certain amount would go to the fund.

“Urban areas generate the bulk of the sales tax revenue in the state,” Clemmons said, commenting that it makes sense to keep some of that revenue to address transit and traffic needs.

Note: The Clemmons proposal is maybe not too far removed from some speculation surrounding the still-secret Haslam plan. Many think the governor will include a gas tax increase of around 10 cents per gallon coupled with “indexing” as Clemmons proposes – perhaps with a floor level, which would block revenue declines when gas prices fall.  There’s also talk of “equalizing” gas and diesel fuel taxes (diesel is now taxed less than gasoline, a distinction Clemmons would apparently continue). The administration has also toyed with including some means of new mass transit funding and with increasing vehicle registration fees.

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