BRADENTON, Fla. - Tennessee's cash-funded transportation system fails to keep pace with billions in backlogged needs, and residents must help decide on how to tackle the problem, Gov. Bill Haslam said during a tour of the state's cities on Monday.
Haslam, following up on a previous swing through the state to highlight the funding problem, outlined big-ticket projects and nearly 1,000 others that he said are likely to be delayed or never completed due to the lack of state funds.
"Today is about starting a thoughtful discussion on what Tennesseans want from their transportation system, today and for their children and grandchildren," he said. "Everyone has a stake in this discussion."
The Tennessee Department of Transportation currently places the state's backlog of funding needs at $6.1 billion – projects that have been approved by the General Assembly and are currently under development, a state agency official said.
Haslam on Monday unveiled a list of $5.4 billion in potential new projects recently identified by TDOT to address growth and safety issues.
The list also includes projects suggested by local government officials that were culled during statewide meetings Haslam conducted in August and September, he said.
Pointing to a comptroller's report earlier this year, Haslam said that transportation funding sources are not expected to be sufficient to maintain current infrastructure or meet new demands as the population grows.
State and local roads are primarily funded with state and federal fuel taxes. The state does not use debt financing, tolls, or general fund revenues for highway construction.
"Tennessee has a debt-free system that is the third-highest ranked in the country, and spends the third least per capita," Haslam said. "Looking ahead five years there are very real challenges that will affect the conditions of our roads and bridges, our ability to recruit the jobs we want in Tennessee, and our quality of life."
While Haslam, a Republican, is not currently advocating the use of debt he pointed to reports on Monday that have been done by state researchers outlining a host of options that lawmakers could consider to deal with the state's funding problem, including general obligation bond financing.
Other options include increasing fuel tax rates or indexing the rates to inflation, applying sales taxes to gas purchases, supplementing highway user taxes with general fund revenue, using debt financing to leverage available public funding with private capital, and allowing local governments to levy local option taxes.
Haslam has indicated that increasing the state gas tax may be likeliest option to begin dealing with funding needs, though he has not presented a plan for lawmakers to consider next year.
Some GOP members and conservation groups have already objected to any consideration of a tax increase.
The state gas tax, currently at 21.4 cents per gallon, was last increased in 1989, while the tax on diesel fuel at 18.4 cents a gallon was last increased in 1990 – making those funding sources the 12th-lowest in the U.S., according to the comptroller's office.
Fuel-efficient vehicles, rising construction costs, and the inability of Congress to pass a long-term transportation funding bill compound what officials have said they consider stagnant sources of state revenue, including the gas tax.
