DALLAS - Tennessee Gov. Bill Haslam wants local officials and road builders to join him in explaining to voters why additional state funding is needed to reduce a $6 billion backlog of deferred highway projects.
Haslam on Tuesday told attendees at a conference in Murfreesboro sponsored by the Transportation Coalition of Tennessee that he is not ready at this point to propose an increase in the state gasoline tax of 21.4 cents per gallon. However, he said raising the gasoline tax may be the only option that would generate the revenue needed to reduce the highway backlog.
"At some point, you're going to have to address bringing in more revenue," Haslam said. "The path we're on now will not work."
Haslam told the group he needs help in convincing state lawmakers and voters that the transportation funding shortfall is serious and must be corrected.
"I think we are in the position of defining reality," Haslam said. "What you can do is spread this message out there about how critical the challenge is for us around infrastructure in this state."
Haslam said he will not seek bond funding for the highway projects when the General Assembly convenes in 2016. Tennessee last issued general obligation bonds for transportation projects in 1977 and has no outstanding highway debt.
"We haven't proposed anything yet," he said. "The point I'm making is, we can't keep going like we are now."
Vehicles are more fuel efficient than when Tennessee last raised its gasoline tax in 1989, while highway constructions costs are much higher now, Haslam said.
"It's not conservative to pass on something that's in worse shape," said the Republican governor. "We inherited good roads. If we pass it onto our kids in lesser condition, we are not doing our job."
Lawmakers may be reluctant to raise the gasoline tax because it takes years to complete a large highway project, Haslam said.
"You realize, well I'm not going to be cutting any ribbons — that's eight years away," he said. "There's a lot of voices that say let's push this off. But the need is not going to go away. We're going to have to do something to address this."
Susan Mattson, a legislative research analyst with the Tennessee treasury, said inflation has reduced the purchasing power of the gasoline tax since it was raised to 21.4 cents per gallon in 1989.
"It's worth about 10 cents per gallon today," she said.
If the state's fuel taxes had been linked to inflation when they were last increased, Mattson said, the current gasoline tax would be 38 cents per gallon and the diesel tax, now at 18.4 cents, would be approximately 30 cents per gallon.
The state fuel taxes generate almost $660 million per year, she said, noting that federal sources account for more than half of Tennessee's annual transportation funding.
A legislative auditor's report earlier this year said each additional penny of gasoline tax would bring in $32 million per year, with each penny of diesel tax generating $9.6 million per year. A 1% sales tax on motor fuels would generate an additional $147 million per year, according to the auditor.
Clarksville Mayor Kim McMillan, a Democrat and former majority leader in the state House of Representatives, agreed that Tennessee needs to revamp its system for funding roads.
"I think we're in crisis," she said at the Murfreesboro conference. "I think we all have to work together to solve this problem."
Susie Alcorn, executive director of the Tennessee Infrastructure Alliance, said the state's gasoline tax-based highway funding system cannot meet the demand.
"We can no longer keep up with the maintenance needs of our state roads and bridges, much less build new projects," she said. "Failure to address this issue means unsafe roads and bridges and lost economic development opportunities."
