While Gov. Bill Haslam continues to mull over the possibility of pushing for a gas tax increase in 2016, legislators have recently filed two bills that would add new money to the state’s highway construction and maintenance fund.
State Sen. Mark Green, R-Clarksville, proposes in SB1451 raising to $150 to the state’s registration fee for electric cars and to $75 the fee for hybrid cars.
Electric vehicles now avoid the state’s 21-cents-per-gallon gas tax entirely while hybrid vehicles use a mix of gas and electricity, reducing the amount of fuel tax paid, but not eliminating it. The state Department of Transportation estimates the average Tennessee vehicle operator pays about $300 per year in fuel taxes (state and federal combined) at current rates.
State Rep. Mark Pody, R-Lebanon, proposes in HB1445 to divert the state’s 7 percent sales tax revenue collected from the sale of tires into the highway fund. That money now goes into the state’s general fund. Legislative staff have not yet prepared a fiscal note estimating how much money would be transferred, and a spokeswoman for the state Department of Revenue said the department currently has no breakdown on statewide tire sales to provide an estimate.
The state currently has a separate $1.35-per-tire tax that would not be affected by Pody’s proposal. Funds collected from that tax, which generated about $6 million last year, go toward recycling programs for discarded tires. The Legislature last year quietly approved a bill, HB1321, extending the tax to cover tires on new vehicles purchased at dealerships. That measure, which took effect Oct. 1, had a fiscal note projecting it would produce an extra $1.5 million per year in revenue for the tire recycling fund.
(Update/note: A reader sends along this observation: “If the tire disposal tax ($1.35) yields $6 million a year, that implies that 4.4 million tires are sold per year. A quick look at the internet suggests the average tire sells in the $100 to $150 range (about $440 to $660 million total sales). Revenue from a 7 percent tax would be about $30 to $45 million.”
Several lawmakers, including House Speaker Beth Harwell and Senate Transportation Committee Chairman Jim Tracy, earlier proposed to transfer money directly out of the general fund, which currently holds a revenue surplus of about $500 million.
Tracy in September filed a bill, SB1435, that would put the transfer at $261 million — the amount Tracy says was “stolen” from the road fund and transferred to the general fund a decade ago when the road fund had a surplus and the general fund was running short.
Haslam toured the state last summer and fall to enhance public awareness of the highway fund’s lack of money to complete a huge backlog of projects and to declare increased funding is needed. But he has proposed no specific plan for increasing revenue and has declined to say whether he will present one to the 2016 legislative session or wait until 2017. The governor has said he wants a “long-term solution” to the highway fund shortage and that the proposed transfer of general fund money would not meet that criteria, although he would be “willing to consider” such a move.
Some other bills filed in the last days of 2015 to be considered in the legislative session that begins Jan. 12 include:
SB1465 by Sen. Mark Green, R-Clarksville, would repeal a cut to the state subsidy provided to cover local property tax payments to veterans. After some heated debate, legislators in 2015 agreed to a proposal from Haslam and the state Comptroller’s Office to cover only the first $100,000 in a home’s value with a state subsidy instead of $175,000. Green’s bill would return to the $175,000 valuation.
HB1457 by Rep. Kelly Keisling, R-Byrdstown, and Sen. Paul Bailey, R-Sparta, would create a new program for honoring Tennesseans for “outstanding community service.” State legislators would nominate residents to receive the honor and become known as “Tri-Star Generals,” with the governor issuing the certificates.
SB1450 by Senate Finance Committee Chairman Randy McNally, R-Oak Ridge, would make the names of those delinquent in paying local hotel-motel taxes a public record. The bill follows a 2015 controversy in Knox County over almost $500,000 in unpaid hotel-motel taxes.
HB1438 by House Finance Committee Chairman Charles Sargent, R-Franklin, calls for installing specified “protection enhancements” at Tennessee National Guard facilities. The National Guard Force Protection Act of 2016, for example, would provide 450 new barriers and 97 magnetic locks with keypads. The bill follows the July killings of four Marines and a sailor at Chattanooga military facilities by a man the FBI says was inspired by “foreign terrorist propaganda.”
HB1431 by Rep. Bo Mitchell, D-Nashville, would prohibit smoking on all property owned by state or local governments in Tennessee.