Governor Bill Haslam scored a major victory on Tuesday as his controversial plan to raise the state's gas tax, known as the IMPROVE Act, survived a key vote by the House Finance Ways and Means Committee.
Debate on the bill lasted more than two hours, the conversation remained cordial but at times became heated.
"Our counties and cities are in desperate need for new highway funding," Representative Barry Doss told his committee.
In January, Governor Haslam rolled out his long anticipated plan to help fund a $900 million backlog in roads and infrastructure projects. The IMPROVE Act or as House Republicans have recently renamed it "The Tax Cut Act of 2017" would raise more than $300 million a year for roads projects by increasing the tax on unleaded gasoline by 7 cents. The diesel tax would also be raised.
Governor Haslam Proposes Gas Tax Increase
In an effort to appease members of his own party, Haslam has also proposed cutting the state's grocery tax and the hall income tax. Officials say the average family in Tennessee would spend $7 more a month on gas but save about $4 on groceries.
"Very few of your are talking a bout the tax cuts we're implementing, we'll be lowering taxes by $400 million," Rep. Dos added.
A number of Republicans though voiced concern over how raising the IMPROVE Act may influence major companies decision's to expand or relocate to Tennessee.
"We're gaining our surpluses by bringing businesses to Tennessee," Rep. Carter said.
State Republicans have balked at Haslam's plan, proposing their own alternatives to the IMPROVE Act that would draw the much needed road funding from the sales tax instead of raising the gas tax. Governor Haslam though has argued that those plans would unfairly burden residents of Tennessee and not charge drivers from other state's who use Tennessee's roads.
Perhaps the most tense moments of the hearing came when Republican David Hawk introduced his amendment to the IMPROVE Act which would raise the road funding from auto sales tax, electric cars sales and registration fees. The alternative plan, which is reportedly backed by House Speaker Beth Harwell, would not raise the gas tax.
"We're in agreement we need to do something, I'm presenting a plan that many of us feel is an alternative," Rep. Hawk said.
With the IMPROVE Act, "We're telling constituents I'm going to take a dollar from a left pocket and put it in your right pock," he added.
In the end though Rep. Hawk withdrew his amendment saying he will likely introduce it again on the House floor. By a voice vote the IMPROVE Act passed through the House Finance Ways and Means Committee and is now headed to the House floor where it is expected to be fiercely debated.
