DALLAS -- Tennessee lawmakers will debate Gov. Bill Haslam’s proposal for the largest increase in transportation funding in almost 30 years in the wake of a scathing report on the state’s highways that found a dire need for more infrastructure spending.

The Republican governor's plan to raise Tennessee’s gasoline and diesel taxes will be up for a vote on Wednesday in both the state House and Senate after passing smoothly through key legislative committees over the past two weeks.

The legislation would raise the state gasoline tax by six cents per gallon to 27.4 cents and the diesel tax by 10 cents per gallon to 30.4 cents. The increases would be phased in over three years. Haslam had sought a gas tax increase of seven cents per gallon and a boost in the diesel tax of 12 cents per gallon but later agreed to the revision.

The General Assembly debate follows the release Tuesday of a report on the state’s roads that said more funding is needed to restore deteriorating roads and bridges.

The report from TRIP, a Washington-based national transportation organization, said that bad roads cost Tennessee motorists a total of $6 billion per year in vehicle damages and that time and fuel is wasted because of congestion.

Increased investment in transportation infrastructure at the local and state levels could relieve traffic congestion, improve road conditions, give a boost to transit, and increase long-term economic growth in Tennessee, the report said.

Crowded roads and deteriorating highways are costing Tennessee motorists $6 billion per year in damaged vehicles and lost time, according to a transportation group.
Crowded roads and deteriorating highways are costing Tennessee motorists $6 billion per year in damaged vehicles and lost time, according to a transportation group.

“The condition of Tennessee’s transportation system will worsen in the future without additional funding, leading to even higher costs for drivers,” said TRIP executive director Will Wilkins. “Tennessee will need to make transportation funding a top priority.”

Nearly a quarter of Tennessee’s major state and local roads are in poor or mediocre condition, with 5% of the bridges considered structurally deficient, the TRIP study said. Congestion is increasing, with travel on the state’s urban roads up 9% since 2013 along with an 8% increase in traffic fatalities from 2015 to 2016.

Motorists support more funding for transportation infrastructure, said Stephanie Milani, public affairs director for the Tennessee AAA.

A recent poll by AAA found that two-thirds of adult motorists believe the federal government should invest more to improve roads and bridges, she said.

“The numbers from TRIP are staggering and show the urgency for a comprehensive transportation funding plan,” Milani said.

Haslam sent e-mails to supporters on Monday urging them to contact legislators in support of the road funding bills, HB 534 in the state House and SB 1221 in the Senate, known as the IMPROVE Act.

The fuel tax increases are “by far, the most conservative plan on the table to increase funding for transportation,” Haslam said in the message. The state has a $10 billion backlog of needed highway projects, Haslam said.

“IMPROVE directly addresses how we fund our roads and bridges for the first time in 30 years, keeping our transportation network safe, reliable and debt-free for the next generation of Tennesseans,” Haslam said.

The new fuel tax rates would generate an additional $250 million per year for the state, $35 million per year for cities, and $70 million per year for counties when fully implemented.

Both taxes would go up by four cents per gallon on July 1, the beginning of Tennessee's fiscal year.

The gasoline tax would then go up by one cent in fiscal 2019 and again in 2020. The diesel tax would go up by three cents in fiscal 2019 and another three cents in 2020.

Tennessee motorists currently pay state fuel taxes of 21.4 cents per gallon of gasoline and 18.4 cents per gallon of diesel, according to the American Petroleum Institute.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.