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Haslam, Ramsey: Raising gas tax is wrong answer for highway funding

January 24th, 2012 9:14 pm by Hank Hayes

Both Tennessee Gov. Bill Haslam and Lt. Gov. Ron Ramsey say raising the state’s 21.4 cent per gallon gas tax isn’t the answer to pay for fixing aging highways.

At an event with Kingsport Area Chamber of Commerce members last Friday, both indicated they’re still searching for a way to step up road building and maintenance.

“It is something in the next year or two that’s going to have to be addressed,” Ramsey, R-Blountville, said of highway construction during the event held at the Kingsport Higher Education Center. “(But) I don’t think raising the gasoline tax is the answer because cars are going to continue to get more gas mileage.”

Haslam, a Republican, added: “Raising the gas tax doesn’t address the issue. We’re going to have to have something that’s usage based.”

Federal and state fuel taxes, plus other fees, have traditionally been main revenue sources to pay for highway construction.

The last time Tennessee’s gas tax went up was in the late 1980s, and the state’s highway program has been debt-free since the mid-1990s.

Virginia, with a 17.5 cent per gallon state gas tax, does a combination of bonding and pay-as-you-go financing, according to the National Conference of State Legislatures (NCSL).

NCSL said America’s states, with many facing budget shortfalls, have little capacity to pay for needed road maintenance and expansion.

Tennessee Department of Transportation Commissioner John Schroer, for instance, told a Kingsport audience earlier this month that the state has about $8.5 billion worth of road projects and only $900 million to spend this year.

At the chamber event last Friday, Ramsey pointed out a $10,000 vehicle bought in the late 1980s costs $30,000 today and does create more tax revenue for the state.

“(But) the gasoline tax is based on a gallon, and the last time I looked, a gallon in 1988 is still a gallon today,” Ramsey said. “Obviously with electric cars coming online, and cars getting 30 to 35 miles per gallon, that’s a problem. ... I don’t know what the solution is yet, but I set up a legislative committee to see what other states are doing and to address this problem.”

Haslam, whose family owns and operates gas selling/travel centers under the Pilot Flying J brand, said the solution might have to be mileage based.

“We’re a ways away from that,” Haslam told the chamber crowd.

NCSL said a mileage pricing system assesses a tax based on the number of miles a vehicle is driven.

“There are other obstacles to a mileage-based fee system, however,” NCSL added. “The Texas Department of Transportation studied the issue, including listening to several citizen focus groups, and concluded the public does not understand the current gas-tax-based system let alone a mileage fee system.”

NCSL added the Texas study discovered the public did not want to be forced to install equipment in their vehicles that could track their movement.

NCSL concluded the $787 billion federal stimulus package provided states with $48.1 billion for highways, transit and other transportation projects as part of the largest new investment in infrastructure since building the interstate highway system in the 1950s.

“(But) unless there are innovations and new money, roads, bridges and mass transportation systems will fall further into decline and disrepair,” NCSL said. “Short-term fixes have been exhausted and the long-term options will be politically painful. ... The short-term successes of the stimulus could not fix the growing gap between available revenue and what is actually needed to maintain our transportation infrastructure.”

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