Tennessee Governor Pushes 7 Cent Hike in Gas Tax

NASHVILLE, Tenn. January 20, 2017; NACSonline reported that Tennessee Gov. Bill Haslam wants to raise the state’s gas tax for the first time since 1989 to help fund his Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy Act (IMPROVE Act), The Tennessean reports. Also wrapped up in his plan are new fees on rental cars and electric vehicles, plus a cut to the state’s grocery sales tax by another half percent.

The overall aim of the plan is to tackle road projects long left languishing for lack of funding. “Everybody in here is concerned that Tennessee is the type of place that attracts great jobs. We can't be in a situation where we're at a competitive disadvantage,” Haslam said.

The proposed plan would bump the state gas tax up 7 cents per gallon of gasoline and 12 cents per gallon of diesel starting in July. By bumping up both gas and diesel taxes, the state would garner an additional $227.8 million for transportation. The IMPROVE Act also would tie the gas tax to the Consumer Price Index, which would allow for inflation fluctuations.

Haslam wants to spread the use of Tennessee roads to visitors and others not living in Tennessee but who drive through the state. “I don't understand why we want Tennesseans to pay for roads that everybody uses,” he said. The Tennessee legislature returns to business on January 30.