Tennessee bill would make it harder to use gas tax for any purpose besides roads

State finance chief says measure would limit governor's flexibility.

The Associated Press

4/22/2008

NASHVILLE, Tenn. — The Senate Finance Committee voted Tuesday to advance a bill that would make it more difficult for the state to use gas tax money for any purpose other than road projects.

The measure sponsored by Sen. Diane Black, R-Gallatin, passed 7-2 to move onto a full floor vote, despite concerns raised by state Finance Commissioner Dave Goetz that it would restrict the governor's flexibility in dealing with the state's worsening revenue forecasts.

Goetz told the panel that the administration has no immediate plans of using gas tax money to plug gaps elsewhere in the budget, but argued that "more options are better than fewer" if the situation deteriorates.

"It is a question of the principle of maintaining flexibility," Goetz said. "I have to prefer — and the governor has to prefer _ having flexibility over not having it."

The shortfall in general fund tax collections for the current budget year rose to $276 million in March and officials plan to meet next week to set projections for the budget year that begins on July 1.

Black said her proposal is designed to return state law to how it read before Democratic Gov. Phil Bredesen took office. It would require the Legislature to specifically approve any money diverted from the road fund instead of simply writing any such changes into the state spending plan.

By law the state's 21.4 cent-per-gallon gas tax is dedicated to the Department of Transportation's road building and maintenance fund. But Bredesen used gas tax money to help bridge budget shortfalls in the first two years of his administration and his predecessor, Republican Gov. Don Sundquist, also used gas tax money for non-road purposes.

Sen. Douglas Henry, D-Nashville and a former longtime chairman of the Finance Committee, chastised Tennessee Road Builders Association Executive Director Kent Starwalt for characterizing such budget moves as "raiding the road fund."

"Avoid the use of the word 'raid,' which represents an opinion rather than a statement of fact," Henry said.

Black's bill would also require a detailed listing of all capital projects that cost more than $1 million.

The companion bill was scheduled for a vote in a House subcommittee on Wednesday.