Legislators say yes to gas tax hike in state

By BRIAN GRAVES brian.graves@clevelandbanner.com
Posted 4/20/17

It was “gas day” in Nashville with the thought of raising the Tennessee’s gas tax giving many legislators indigestion.

On Wednesday, lawmakers had the chance to formally adopt or reject …

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Legislators say yes to gas tax hike in state

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It was “gas day” in Nashville with the thought of raising the Tennessee’s gas tax giving many legislators indigestion.

On Wednesday, lawmakers had the chance to formally adopt or reject the plan, which seeks to raise the tax on gasoline and diesel fuel by 6 and 10 cents, respectively, while also calling for a variety of tax cuts.

More than 40 county road superintendents were in attendance in the state House chamber as the debate and vote took place.

The vote in the state House, which was expected to be a nail-biter, ended up not even being close.

State House members gave Gov. Bill Haslam’s IMPROVE Act a 60-37 vote after more than 4 1/2 hours of floor debate.

The bill will increase the tax on gas by 6 cents and the tax on diesel by 10 cents over a three-year period. That will be the first increase on those taxes in 30 years.

The measure also includes a cut in the state’s grocery taxes by 20 percent.

Also included in the bill is a $5 increase in registration fees and a $100 fee for electric vehicle owners.

Those funds should bring in $350 million with the state realizing $245 million. Cities would divide $35 million and counties would split $70 million.

The measure quickly passed the state Senate 25-6.

There are some differences in the Senate and House versions, which would usually call for a conference committee made up of members of both Houses; however, Speaker Beth Harwell said she expected the state House would reconcile the differences with a vote on Monday.

All four of Bradley County’s representatives to Nashville cast their votes in the affirmative on the measure and they all seemed to have two things in mind — Highway 60 and tax cuts.

State Rep. Kevin Brooks admitted as much when he said he had two words in his mind when he cast his “yes vote”: Highway 60.

“Today, we passed HB 534 in the House, better known as the IMPROVE Act,” said Brooks (R-Cleveland). “Yes, this bill will improve our roads and bridges. It will protect Tennessee jobs and Tennessee companies, but more importantly it is the largest tax cut in Tennessee history.”

Brooks said the act as amended cuts nearly $300 million in taxes next year and cuts more than $500 million annually in state taxes at its full implementation of Food Tax cuts and Hall Tax cuts.

“Yes, for badly needed local road projects like Highway 60/Georgetown Road, we did slightly increase fuel cost and fees on the people who use the roads and bridges most,” Brooks said. “However, to offset any increase, we decreased the Food Tax even more by $125 million.”

“That’s right — we are sending back home to Cleveland larger decreases in taxes, than we increased, to build better roads and bridges in Bradley County and Cleveland. No one can dispute we badly needed better roads and bridges at Exit 20. Now, more will follow.”

Brooks noted the city of Cleveland will receive an additional $400,000 and Bradley County will get and additional $800,000 in transportation funding.

“Locally, we thank our elected officials and leaders from whom we received Resolutions of Support, signed and sent to us in Nashville from the Cleveland City Council, Cleveland/Bradley Chamber of Commerce and a letter of support from the Bradley County road superintendent.”

“We are also thankful for the letters of support we received from local industries, who employ thousands of Cleveland residents, thanking us for the $113 million in tax cuts to Tennessee manufacturers. Thank you to M&M Mars, International Paper, McKee Foods and Resolute for writing.”

Brooks thanked all of those for “letting us know how many of you support our efforts to improve our infrastructure, make our city and county safer, more efficient and to make Cleveland the greatest place to live and work in this great State of Tennessee.”

State Rep. Dan Howell (R-Georgetown) said the bill is a “tax swap.”

“According to the Americans for Tax Reform, a national organization that opposes all tax increases, a vote for the IMPROVE Act is actually a vote to cut taxes,” Howell said.

“These increases will raise about $345 million over the next three years for Tennessee’s roads and bridges,” Howell said. “That increase would be offset by corresponding tax decreases of roughly $563 million over 5 years, or, a net tax decrease of $218 million. This includes a full 20 percent cut in sales tax on food and a $113 million decrease in the state’s Franchise and Excise tax, which is now the third highest in the nation. This is a huge roadblock to recruiting new industry and creating jobs. The plan also includes a full 1 percent acceleration in the phase out of the Hall income tax.”

Howell noted that according to the USDOT, the average family of four will spend about $5.54 in additional fuel taxes each month under the IMPROVE Act.

He added the U.S. Department of Agriculture says the average family of four spends about $770 per month on food.

“Using those Federal numbers, that family will save $2.18 cents per month in taxes, while helping rebuild our infrastructure in Tennessee,” Howell said.

“In Bradley County, twelve projects are listed, including six bridges that are 10 to 15 years past their expected lifespan and several road projects including the widening of Highway 60 to 4-lane,” Howell said. “I am excited to see TDOT survey crews already on site surveying for the right-of-way on Highway 60.”

Howell noted the funds will be used only for roads and bridges.

“The bill specifies that bike lanes and greenways cannot be funded through the IMPROVE Act,” he said. “But let me be clear, TDOT serves as a pass-through for some Federal dollars that can be used for those projects. But IMPROVE Act revenue is restricted to roads and bridges.”

“I believe this is responsible legislation. It cuts taxes, provides funding for our infrastructure, improves safety (such as on Highway 60 near Hopewell school) and allows us to continue to have some of the best roads in the nation without borrowing money and spending hundreds of thousands of your tax dollars on Interest payments,” Howell said. “Our Tennessee roads are paid for. I want to keep it that way. That’s why I voted for the Improve Act.”

State Sen. Mike Bell said his vote for the act was based on several factors.

“First, there was a general agreement even among those who opposed this plan that our long term transportation needs would not be met without an increase in funding,” Bell said. “In Bradley County, we have no further to look than Highway 60 from Cleveland Middle School to Hopewell. That stretch of road was overcrowded when I lived off Highway 60 in the 1980s. It can be a nightmare now at certain times of the day and it will only get worse with the construction of the new city school.”

“Second, I believe the IMPROVE Act was the most conservative plan put forward,” he added. “The plan does raise taxes by $340 million, but then it cuts other taxes by $410 million. The act continues to fund roads from the fuel tax instead of using general fund money like the competing plan proposed to do.

Bell said he was reminded of a quote from former President Ronald Reagan when the signed the Transportation Act of 1982 which see said is “as true today as it was then.”

“When we built our first highways, we paid for them with a gas tax — a highway user fee that charged those of us who benefited most from the system,” Reagan said. “It was a fair concept then, and it is today.”

State Sen. Todd Gardenhire did not send a statement on the vote, but previously said he committed to voting for the measure because “there are a lot of projects needed in my district.

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