The Hawk option: No gas tax hike, just send sales tax money to roads

Two top House Republican leaders on Wednesday countered Gov. Bill Haslam’s proposed gas tax increases with an alternative plan that calls for diverting money from the state’s existing 7 percent sales tax base to fund needed road improvements, reports the Times-Free Press.

“A quarter percent of one percent of those funds [we] would simply allocate to transportation funding needs,” said Assistant Majority Leader David Hawk, R-Greeneville, who unveiled the plan at a news conference with Majority Leader Glen Casada, R-Franklin.

Haslam’s plan seeks to raise the existing 21.4-cents-per-gallon gas tax by 7 cents and the 18.4 cents diesel tax by 12 cents. He says the hikes are necessary to tackle the state’s estimated $10.5 billion backlog of nearly 1,000 transportation projects.

Fuel tax increases, the first since 1989, would raise an estimated $227.8 million for state needs and another $117.1 million for cities and counties under statutory sharing provisions.

Other aspects of Haslam’s plan include raising vehicle registration fees and imposing a $100 annual fee on electric vehicles. That raises an additional $51 million for a total of $278.5 million for state projects.

Hawk said his plan is far simpler and involves no tax increase. Diverting a quarter percentage point of Tennessee’s 7 percent sales tax to transportation funding, he said, would provide two-thirds, about $194 million, for state roads and some $95.5 million for cities’ and counties’ combined share.

Note: Over in the Senate, the proposal got a chilly initial reception. Statement from Lt. Gov. Randy McNally below, along with the Hawk press release.

Statement from Lt. Gov. Randy McNally, emailed to media after the Hawk-Casada press conference:

“Tennessee is one of the most fiscally sound states in the nation. Our taxes are minimal, our debt per capita is low and we have a small and efficient government. We accomplished this by being frugal, disciplined and smart. We have an outstanding pay-as-you road system that operates with little to no debt. We accomplished this with dedicated funding through our gasoline user fee. 

Put simply: our formula for fiscal stability is proven, established and envied. Our system has earned us a Triple-A bond rating from all three ratings agencies. Any move away from the formula and the use of dedicated funding opens the door to debt and puts our fiscal stability at risk.”

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News release from Rep. David Hawk

(NASHVILLE) — Today in Nashville, State Representative David Hawk (R–Greeneville) officially announced a funding plan to help address the state’s transportation and infrastructure needs. He was joined by State Representative Glen Casada (R–Thompson’s Station) and other House leaders.

Currently, the Tennessee Department of Transportation faces a reported $10.5 billion backlog of road and bridge projects across the state that have been approved, but that do not currently have funding.

Under the Hawk plan, a quarter of 1% of the state general sales tax would be solely dedicated to the state transportation fund, creating a reliable and sustainable funding source that does not raise taxes on Tennesseans. In total, the plan would transfer $291 million per year to the Tennessee Department of Transportation and local governments to be used on road construction projects and infrastructure.

“I believe this plan will create a dedicated, recurring fund that prioritizes both the taxpayer dollar and our long-term infrastructure needs,” said Representative Hawk. “I look forward to working with the Governor’s administration on this and other ideas over the coming months.”

“We must find a permanent solution to our transportation funding problems,” continued Representative Casada. “What I like about David Hawk’s plan is that it is simple, it is predictable, and it is a conservative approach using existing dollars in the state budget.”