Tenn. governor won’t seek raising state fuel tax

The Transportation Department receives its funding almost entirely from the gas tax and through the federal government. The shortfall in the general fund that pays for most of the rest of state operations is expected to reach up to $800 million by the end of the budget year in June.

By ROSE FRENCH
The Associated Press

11/19/2008

NASHVILLE, Tenn. — Gov. Phil Bredesen said Tuesday he won’t seek a hike in Tennessee’s gas tax as a way to bolster the state’s ability to build and repair roads.

The state’s road fund is struggling because people have been driving less amid high gas prices and a worsening economy, Transportation Department officials said in a budget hearing.

Bredesen, a Democrat, told reporters afterward that he’s not looking to hike taxes of any kind, including the state’s current 21.4-cent tax on each gallon of gas. In general, he said, it’s a terrible time to be asking people to pay more taxes, considering national economic conditions.

“I have always said since I was running for this office we need to do a fuel tax increase of some sort at some point in time,” Bredesen said. “The 21.4 cents that was set in the 1980s is no longer adequate to build the roads we have here.

“I think this is an issue the state is going to have to deal with,” he said, but added that he doesn’t “have a particular reason to drive it (gas tax) through this year at great political cost.”

State Transportation Commissioner Gerald Nicely said his department is $10 million below budget through the first quarter of the budget year, mainly because of decreased vehicle miles traveled in the state.

The governor had asked departments to trim 3 percent out of their spending plans, but now says he will likely have to cut about 10 percent out of their budgets. Several public hearings are scheduled over the next two weeks to discuss department budgets for the next fiscal year.

As part of his budget, Nicely proposed $350 million in bonds to replace or repair about 200 bridges in the state. The revenue source for the bonds would be federal bridge replacement funds the state gets every year.

The bond proposal — which would be a departure from the state’s pay-as-you-go roadbuilding method — would need legislative approval, but Bredesen said he thought it could serve as a possible way to boost jobs in the state.

“We’re going to have to be allowing some other alternatives for building roads as time goes on, looking at things like toll roads, for example, which would be by definition be bonded projects,” Bredesen said.

“It seems to be a way to do some economic stimulus to create some jobs here ... and leaving us with infrastructure,” he said.

Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.