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.”

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.”

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

  • Michael Combs says:

    Simple math: Although there is a current excess in the general fund, reducing the income to the general fund by 1/4 of 1% would only be a temporary fix – definitely not long term and could result in having to cut back on other services.

    The backlog of needed road repairs is estimated at $10.5 BILLION. The gas tax will produce added income for repairs at $396 million which, over coming years, will make a major difference in condition of our roads.
    Hawk’s plan of taking $ out of the general fund will only produce an estimated $290 million and what will happen in coming years when that 1/4 of 1% might put a squeeze on other state services?

  • David A. Collins says:

    The gas tax is the only logical way to fund highway projects. It worked fine until then Governor Bredeson raided the highway fund one year in order to balance the budget without raising taxes anywhere else. It was supposed to be a “loan” but never got paid back. As a result, the highway fund has lagged behind where it should be, hence, the backlog of paving projects. Let the gas tax (even if it must be increased) pay for the roads and tell the politicians to keep their greedy hands off of it!

  • Michael Lottman says:

    Putting the cost of roads and highways totally on the state sales tax simply burdens those least able to afford it with payment for something they did not choose to buy. Or else it takes more money away from education, health care, and other human and social services that are already grievously underfunded. What makes people think we can maintain and expand our transportation network without putting up the money to pay for it? Sooner or later new needs require new revenues whether we like it or not. Hawk’s plan, or Haslam’s for that matter, does not generate anywhere near what is needed for even a down payment on our transportation and infrastructure needs.

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