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AASHTO Journal

Tennessee Revenue Proposal Advances in Legislature; Governor Signs Off on Senate Changes

A major set of transportation revenue proposals continues to make progress in the Tennessee General Assembly, the AP reported, as Gov. Bill Haslam said he accepts changes the Senate has made to his plan.

capitol0816.jpgHaslam in January proposed raising various taxes and fees to pay for nearly 1,000 new transportation projects across the state while cutting taxes on food and manufacturing. His plan included raising Tennessee's per-gallon "road user fee" on gasoline by seven cents a gallon for the first hike since 1989, and by 12 cents on diesel fuel used mostly by heavy trucks.

But the Senate Transportation and Safety Committee trimmed the gas tax hike to six cents and the diesel increase to 10 cents, with the Majority Leader Mark Norris saying that would mean people save more in the tax cuts on food than they would pay for motor fuel increases.

The AP reported March 15 that the Senate panel also made deeper cuts to the sales tax on groceries than the governor proposed, "and added more property tax relief for the elderly, veterans and the disabled."

With all that, Haslam said a smaller fuel tax hike will mean less new revenue to tackle Tennessee's $10 billion backlog in road and bridge projects, the AP story said, "but he's willing go along with the changes if it helps the measure's prospects."

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