Gov. Haslam proposes gas tax hike for state transportation

NASHVILLE, Tenn. (AP) – The Latest on Tennessee Gov. Bill Haslam’s transportation proposal (all times local):

12:45 p.m.

Nashville Mayor Megan Barry is lauding Republican Gov. Bill Haslam’s proposal to allow cities to hold referendums on adding a sales tax surcharge to pay for mass transit projects.

Officials in the booming Nashville region have identified $6 billion in transit needs over the next 25 years.

Barry says she believes people in Nashville “are willing to pay for a mass transit system that meets the needs of our growing community.”

The local-option proposal is part of Haslam’s larger plan announced Wednesday to boost transportation funding in the state, largely through a 7-cent tax increase on each gallon of gasoline and 12-cents per gallon on diesel.

Tennessee’s sales tax rate is 7 percent, while local governments can charge up to 2.75 percent more.


11:15 a.m.

Republican Gov. Bill Haslam is proposing to raise Tennessee’s tax on each gallon of gasoline by 7 cents while cutting the state’s sales tax on groceries and income from earnings on stocks and bonds.

Haslam says average motorists would pay an extra $4 dollars more per month as part of his plan to generate $278 million annually in new money to pay for road projects around the state.

The governor says he would balance the gas tax increase with proposed cuts of $55 million in the sales tax on groceries, $113 million in corporate taxes for manufacturing companies and $102 million in the Hall tax on investment income.

Haslam also wants to tie the gas tax to inflation and let cities seek a sales tax surcharge to pay for transit projects.


sen_minority_leader_  Lee Harris In response to the Governor’s proposed series of tax reforms, Senate Minority Leader Lee Harris released the following statement.

“While we are waiting to receive more details on the Governor’s proposal later this week, particularly details on the franchise and excise tax cut proposal, the Governor’s remarks about infrastructure and public transit are initially encouraging. Democrats and many others have been pushing for solutions to solve our road issues. In my county alone, the state has $874 million in backlogged road projects, like the Lamar Avenue project, which has been shovel-ready for 15 years. Seventy-seven thousand trucks pass through Tennessee every day. It’s up to the state to ensure the highways are in good condition. As important, we have filed bills to expand public transit options by giving local governments the option to raise transit revenue, an idea the Governor endorsed this morning. I am also initially encouraged by the cut to grocery taxes, which is the kind of broad-based reform that has the potential to give some relief, albeit minor, to all Tennesseans. Finally, the Governor again raised the issue of cuts to the Hall Income tax, which is likely to raise concerns for local governments around our state that use that revenue for law enforcement, among other needs. Unlike cuts to taxes on groceries, Hall Income Tax cuts only help a very limited number of individuals, around 4.3% of Tennessee households and, in some counties, like mine, less than 1% of households pay the tax.”

Categories: Government & Politics, Regional News

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