Governor Haslam and other administration officials have stated since announcing the
IMPROVE Act , now the “Tax Cut Act of 2017,” on January 18 that the purpose of the gas and diesel tax increases included in the bill is to fund 962 needed road construction projects in all 95 counties for a price tag of $10.5 billion.
These projects, however are the seventh in priority in a list of seven things for which the additional funds raised in the bill can be used.
Of even greater concern, not all 962 of these projects are guaranteed to be undertaken, because the Tennessee Department of Transportation (TDOT) will have the authority to modify the project list that will be incorporated into the law when finalized.
The seven things that additional funds from the bill are scheduled to be used for are identified in the Fiscal Memorandum prepared by the Tennessee General Assembly Fiscal Review Committee for HB 534 / SB 1221:
Establishes the intent of the General Assembly that all revenues derived from the increased taxes and fees imposed by the IMPROVE Act on petroleum products, alternative fuels, rental of motor vehicles, and motor vehicle registrations, shall be used to:
- Maintain roads and bridges on the state highway system, including the interstate highway system
- Support economic development through the construction of transportation facilities in accordance with the State Industrial Access Act and the Local Interstate and Fully Controlled Access Highway Connector Act
- Maintain public roads and bridges within the boundaries of the state parks
- Support local government investment in transit programs to improve regional transit services across the state and help manage congestion along major highways
- Assist rural transit providers in improving the efficiency of demand response services
- Support projects and programs identified in the Department of Transportation’s annual transportation improvement program
- Fund the development and construction of 962 projects specified in the IMPROVE Act
Authorizes the Department of Transportation (TDOT) to recommend modifications of the project list, and requires the Department to report to the General Assembly, beginning on or before July 1, 2018, and annually thereafter, on the status of projects listed in the IMPROVE Act. (emphasis added)
“The Fiscal Review Committee was created by statute in 1967 as a special continuing committee of the General Assembly. The Committee is composed of six senators and nine representatives, elected by members of the Senate and House of Representatives respectively. In addition, the speaker of each house and the chairman of the Finance, Ways and Means Committee of each house serve as ex officio members,” the Tennessee Blue Book, which serves as a manual of useful information on our state and government, states on sheet 132 of 160.
“The committee also prepares fiscal notes for all general bills or resolution that are introduced in the General Assembly that have a fiscal effect on state or local government,” the Tennessee Blue Book says of the Fiscal Review Committee.
Some of the items that the increased gas and diesel taxes can be used to fund may come as a surprise, particularly the ones related to the “hot button” issue of transit programs, the funding for which was to be restricted to local governments.
The list of 962 projects includes 15 that will be dedicated to “Intelligent Transportation Systems,” perhaps better known as distracted driver programs at a cost of $46 million, as The Tennessee Star reported previously.
Currently, 1.6 percent of the gasoline tax and 2 percent of the diesel tax is allocated to the State Department of Revenue for the collection of the tax and an additional amount is allocated to debt service. These allocations were previously reported by The Star and confirmed by Rep. Susan Lynn (R-Mt Juliet).
IMPROVE Act “Tax Cut Act of 2017” seeks to allocate all new revenues from the increase portion of the gas and diesel tax to the Highway Fund, but does nothing to address the $97 million in the original portion of the “user fee” taxes estimated to go to the General Fund and Debt Service (Sheet 99 of 518, Page A-67.)
Editor’s Note: The linked fiscal note for HB 534 / SB 1221 is the most recent available on-line, which does not yet reflect the removal of the property tax relief benefits, which have since been addressed in a separate bill.