The Tennessee General Assembly last week gave a thumbs up to Gov. Bill Haslam’s proposal to increase the state’s gas tax (see story, page A1), marking a big first step towards fixing road problems both locally and across the state.
The legislation will increase the state’s tax on gasoline by six cents per gallon, and the tax on diesel by 10 cents per gallon. Motorists will first notice the increase on July 1, when fuel increases four cents. That will mark the first increase in Tennessee’s gas tax since 1989. Coupled with slight increases to the cost of vehicle registration and a $100 annual fee on electric vehicles, it is expected to generate $350 million in revenue for the state’s transportation department, as well as new money for local governments across the state.
Already, TDOT has identified several projects in Scott County that it says will be funded by the tax hike (see chart, page A6). Among them are a long-awaited fix to Oneida’s U.S. Hwy. 27 bottleneck, a major project to improve U.S. Hwy. 27 south of Robbins and a project to improve S.R. 52 from Rugby to Elgin.
Of course, no timeline has yet been set for any of those projects, and the reality is that their completion is years away. You don’t have to be a math whiz to put two and two together. The Haslam administration says there is a $10 billion backlog in major road projects, and the tax will generate $350 million in new money. It would take years to complete all those projects, even if new projects were not becoming necessary in the meantime (and they will be).
Still, the Improve Tennessee Act is a noteworthy accomplishment, especially for local governments like Scott County’s, which rely almost exclusively on the local share of the state gas tax to fund road needs.
Unlike many counties, Scott County chooses not to supplement its road department with local tax revenue, contributing less than $500 annually to local roads needs. The road department’s budget is funded almost solely by the state gas tax. Although an exact figure is not available, the Improve Act will generate additional revenue for the local road department, which should provide more money to fix the community’s ailing roads.
Another, less discussed provision of the legislation would allow counties and municipalities to hold referendums to pass a local option sales tax or other tax increases to fund transportation projects.
With the fuel economy of the average vehicle consistently improving, and the cost of materials to build and repair roads consistently increasing, it’s a no-brainer that one of two things have to happen: Scott County’s roads will continue to deteriorate, or push will come to shove and property owners will have to foot the bill for increased funding to the road department. After all, you can’t fix roads with materials you don’t have and can’t afford to buy.
An increase to the gas tax is a fair alternative to taxing property owners, because it directly places the tax burden for our roads on the people who benefit from those roads — guests as well as residents — instead of placing it where it usually ends up being placed, which is on the backs of homeowners.
So don’t under-estimate the importance of last week’s votes in the House and Senate. Even with a Republican super-majority in the legislature considering a Republican governor’s proposal, it was never a foregone conclusion that the Improve Act would pass. Conservatives are generally shy about approving any sort of tax increase, regardless of whether a need can be shown.
A six-cent increase on gasoline sales is not a magical formula that will instantly solve Scott County’s road problems, and that’s why it can hardly be called a solution. But it is a start. Ultimately, it’s difficult to believe that Scott County won’t have to take a closer look at local funding if it is ever going to truly fix all its roads. That will be an uphill battle for whomever chooses to fight it, but at least the state has taken the lead in the fight.