Similar To Haslam, Democrats Want to Increase Gas Tax 5 Cents Per Gallon But Also Want Sales Tax Revenue for Mass Transit

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Two leading Democrats in the Tennessee General Assembly support the main element of Gov. Haslam’s plan to fund road construction by increasing the state tax on gasoline.

For State Rep. John Ray Clemmons (D-Nashville) and State Sen. Sara Kyle (D-Memphis), however, it’s a matter of degree.

 

While Gov. Haslam wants to increase the tax on gas by 7 cents per gallon, these Democrats want to increase it by 5 cents per gallon. As for the diesel tax, Democrats would increase it 9 cents per gallon, 3 fewer than the 12 cents per gallon increase Gov. Haslam has proposed.

The Democrat gas tax proposal has a great deal in common with Gov. Haslam’s proposal, and very little in common with the Republican alternative to Haslam’s plan. That alternative, known as the Hawk Plan, would fund road construction by reallocation 0.25 percent of the sales tax, while not raising gas taxes.
Like Gov. Haslam’s proposal, the Democrats want gas taxes to increase automatically every year.

While Haslam simply proposes indexing the annual increase to the rate of inflation, Clemmons and Kyle want a more complex indexing formula, based on:

(1) The state’s population growth rate, multiplied by seventy-five percent (75%); and
(2) The rate of inflation, multiplied by twenty-five percent (25%).

“Similar to Haslam’s plan, it would also increase motor vehicle registration fees and address Tennessee’s open container law which is currently costing the state $18 million in federal funds,” News Channel 5 reported.
The Democrat alternative to the Governor’s gas tax proposal, filed on February 9 as HB 1243 in the House and SB 1101 in the Senate, has another interesting element.

They want to divert some of the state’s sales tax to fund mass transit.

The Tennessee General Assembly website provides this summary of HB 1243:

Highways, Roads and Bridges – As introduced, increases gasoline and diesel tax rates and allocates revenues to highway fund; authorizes local option gasoline tax and surcharge; increases registration fees; creates transportation services district consisting of certain counties; authorizes special allocation of surplus state tax revenue within district to eligible counties for transportation services; extends Class C misdemeanor offense of consuming an alcoholic beverage or possessing an open alcoholic beverage container in an operating motor vehicle to passengers.

 

“The Democrats’ plan would create a set of regional transportation districts — Nashville and its suburbs, for instance,” Nashville Public Radio reported:

Each district would get a lump of money any time Tennessee manages to bring in more sales tax revenue than state budgeters have projected.

State Rep. John Ray Clemmons, D-Nashville, says it’s a way to help cities handle the economic activity they create.

“The areas that … are experiencing the biggest growth, have the biggest need,” he says. “So it’s essentially creating a cycle.”

“The proposal, HB 1243, has little chance of passing in the Republican-dominated state legislature. But Democrats say they’ll consider it a victory if elements of their plan make it into the final road-funding measure,” Nashville Public Radio noted.

http://nashvillepublicradio.org/post/tennessee-democrats-take-money-sales-tax-and-put-it-mass-transit

News Channel 5 offered a similar assessment of the bill’s chance of success:

Democrats don’t believe Governor Haslam’s plan does enough to encourage and fund mass transit projects, specifically in Nashville and surrounding middle Tennessee counties.

“His plan fails to create a dedicated revenue stream for alternative forms of mass transit and mass transportation,” state Representative John Ray Clemmons, a Democrat from Nashville, said on Monday.

“I think the governor’s plan failed to account for the additional impact that population growth also has on our transportation infrastructure,” he added.

Republicans have a super majority in both the Tennessee House and Senate, forcing Democrats to admit the likelihood of TNForward passing would be slim, still though, they urged cooperation on behalf of Governor Haslam.

You can read the full bill here:

 

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