NASHVILLE — Both chambers of the Tennessee General Assembly on Wednesday passed the Improve Tennessee Act, which will hike the state’s tax on gas and diesel sales.
The Improve Act now awaits only the signature of Gov. Bill Haslam, who proposed the tax hike and made it the signature piece of legislation in 2017 as a way to fund the state’s $10 billion backlog of road projects.
Once thought to have an uphill battle to becoming law, the Improve Act passed by a relatively comfortable margin on Wednesday. In the Senate, where its passage was never in question, the bill passed by a 25-6 margin, with only a handful of Republican Senators voting against the measure. In the House, the bill passed by a 60-37 margin.
Both Sen. Ken Yager, R-Kingston, and Rep. Kelly Keisling, R-Byrdstown, voted in favor of the legislation.
The bill will eventually increase the price Tennesseans pay at the pump by seven cents for gasoline and 11 cents for diesel, beginning July 1. The tax increase is expected to generate $250 million for the Tennessee Department of Transportation, which the Haslam administration says will fund 962 projects spread across the state’s 95 counties. The tax hike will also generate more roads funding for local governments, who rely on their share of the state’s gas tax to fund road maintenance projects. The administration has estimated that counties across the state will receive $70 million, while cities will receive $35 million.
While the gas tax hike is the main component of the legislation, the bill also delivers a variety of tax cuts, which the Haslam administration has billed as “the largest tax cut in Tennessee history.” Specifically, shoppers will see their grocery bill decrease slightly, as the legislation cuts the sales tax on groceries by an estimated $125 million. The bill also cuts business taxes for manufacturers, such as some of Scott County’s leading employers — Tennier Industries, Great Dane Trailers, Takahata Precision Tennessee and JDS Technologies.
While critics of the legislation have complained that it does not do enough to cut taxes in order to offset the increased gasoline tax, Americans for Tax Reform has stated that the plan will result in tax savings for the average Tennessee family.
In Scott County, TDOT says the Improve Act will help fund a variety of projects that are on the drawing board. Among them are improvements of the five-mile bottleneck stretch of U.S. Hwy. 27 through Oneida, which carries an estimated price tag of $3.5 million, along with the $1 million project to improve a five-mile stretch of S.R. 52 from the Scott-Morgan line to its intersection with U.S. 27, and a $29.1 million project to improve a 3.8-mile stretch of U.S. 27 from Wolf Creek Road to the start of the three-lane in Robbins.
Among the bridge projects that TDOT says the Improve Act will help fund are the Niggs Creek Road bridge over the Norfolk-Southern Railway ($533,000), a bridge over an unnamed branch on Black Creek Road near Robbins ($194,000), a bridge over Stanley Creek on Stanley Creek Road in Pioneer ($551,000), a bridge over Jellico Creek on Angel Valley Road east of Winfield ($638,000), a bridge over Puncheoncamp Creek on Grave Hill Road west of Oneida ($178,000), and a bridge over Pine Creek on O&W Road near Oneida ($998,000).
No timeline has been set for any of those projects.
There has also been no estimate on how much additional revenue Scott County Road Department will receive from the gas tax hike, although the local road department — which depends almost solely on its share of the state gas tax for its budget — will receive additional revenue.