Senate panel goes for revised gas tax bill

The Senate Transportation Committee approved Monday a revised version of Gov. Bill Haslam’s transportation funding legislation. Instead of a July 1 increase of seven cents a gallon on gasoline, the new version –  changed with the governor’s approval – calls for a six-cents-per-gallon increase phased in over three years. The diesel fuel tax would also be phased in, rising over three years by 10 cents per gallon rather than an  July 1 increase of 13 cents as originally proposed.

Excerpt from The Tennessean’s account:

Senate Majority Leader Mark Norris, R-Collierville, said after conversations with Haslam in recent days, they had reached an agreement on the various changes to his bill.

… Among the changes included in Norris’ amendment were a portion that would provide tax relief to the elderly and disabled veterans, reduce the sales tax on groceries to 4 percent, and a tax hike on gas and diesel fuel of 6 cents and 10 cents per gallon, respectively. (Note: The deal cuts the grocery tax by 1 percent – it’s currently 5 percent – instead of half a percentage point as Haslam proposed.)

The gas and diesel tax increases would be phased in over three years. For the upcoming 2017-2018 fiscal year, the gas tax would be increased by 4 cents. In each subsequent fiscal year it would increase by 1 cent.

The diesel tax would be increased by 4 cents in the upcoming fiscal year and would be hiked in the following fiscal years before maxing out at 27 cents in fiscal year 2019-2020.

Unlike the phased-in approach on the gas and diesel taxes, the decrease in the state’s sales tax would be immediate. The cuts to the tax on groceries would result in a $120 million reduction in revenue for the state.

… Other significant changes included in Norris’ amendment is a portion that would would increase the amount of tax relief a service-connected disabled veteran could receive. Right now, eligible veterans can receive tax relief based only on the value of the first $100,000 of their home. The latest proposal would increase the amount to $135,100.