NASHVILLE, Tenn. — The ink may be dry on a new state law that boosts funding for road projects through Tennessee’s first gas tax hike in 28 years, but that doesn’t mean all Republicans running for governor are happy with it.
The 4-cent hike on the tax on each gallon of gas went into effect in July, and the law calls for further 1-cent increases in each of the next two years.
The revenue generated by the taxes is part of the road funding plan promoted by term-limited Republican Gov. Bill Haslam. Dubbed the Improve Act, the measure was coupled with offsetting tax cuts in other areas.
Six of the seven major candidates for governor appeared at a Tuesday forum hosted by the Tennessee Business Roundtable, which supported Haslam’s transportation funding plan.
Former state Sen. Mae Beavers, R-Mt. Juliet, has made repealing the tax increase a major part of her campaign platform. Businessman Bill Lee and House Speaker Beth Harwell said they weren’t comfortable with the gas tax hike but said they wouldn’t go so far as to try to turn back the Improve Act.
Lee, the owner and CEO of a construction services company in Franklin, told the business leaders that the gas tax hike has disproportionally hurt rural Tennesseans.
“Those folks who often times have to drive two counties to go to work, it matters to them a lot,” he said. “And as a guy who has 500 vehicles, I feel that struggle as well — although I’m a big business, I can absorb those costs.”
Harwell said she was unsuccessful in her efforts to find alternative methods to pay for roads during this year’s legislative session.
“I had a little bit of a problem with the Improve Act at the very beginning, I will be first to admit that,” she said. “To me, relying on gas taxes is not a sustainable source going forward, because one-fourth of the cars coming on to the market over the next five years won’t even use gas.”
Beavers said she opposed the tax increase at a time when the state is enjoying a large budget surplus. Asked whether she would support a tax hike amid poor economic conditions, Beavers said she would not.
“When you don’t have the money, you cut back,” she said.
Knoxville businessman Randy Boyd, a former Haslam Cabinet member, did not specifically address the gas tax during the forum, though he has been a vocal supporter of the cuts on taxes for large manufacturers that is included in the Improve Act. Boyd said improving access to broadband in rural areas could alleviate traffic congestion issues.
“Why does everybody have to drive to one destination to go to work?” he said after the event. “When you have broadband, you can work from home, and we can have satellite offices in small rural towns where there’s a comfortable lifestyle, and you can walk to work and your children can walk to school.”
Republican U.S. Rep. Diane Black of Gallatin did not attend the forum, sending a video message to business leaders because she was away.
The Democratic candidates were less hesitant about their support for the Improve Act, which includes a provision to allow local governments to hold referendums on raising taxes for mass transit projects.
“I would say that we made the right move as a state in the Improve Act,” said former Nashville Mayor Karl Dean. “Clearly you have to take care of infrastructure.”
House Minority Leader Craig Fitzhugh of Ripley noted that the measure would not have passed the House without Democratic support.
“We passed that thing,” he said. “We talked about it long and hard, but we thought it was the right thing to do.”
Fitzhugh recalled the words of the late Democratic Gov. Ned Ray McWherter: “Roads plus education equals jobs.”
“If you have an educated, healthy workforce and roads to connect, then we will have a solid economy,” Fitzhugh said.