A new tax may not be attractive to some but is a necessity according to Tennessee Gov. Bill Haslam.
During an announcement on Wednesday, Jan. 18, Haslam unveiled a comprehensive and strategic plan geared to cutting taxes on food and manufacturing while working to provide safe and reliable transportation to “support future job growth.”
The IMPROVE Act (Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy) is the first piece of Haslam’s NextTennessee legislative plan.
According to the Office of the Governor, the Act cuts the sales tax on groceries another .50 percent ($55 million) to 4.5 percent — equivalent of one percent ($101 million) cut during Haslam’s administration. Along with tax breaks for manufacturing companies to be “more competitive, the office is estimating IMPROVE to cut taxes by an estimated $270 million.
While providing tax reductions in those two departments, IMPROVE would increase the road user fee by seven cents for a gallon of gas, 12 cents for a gallon of diesel and car registration fees by $5 for the average passenger vehicle. Other changes in the Act is an annual user fee on electric vehicles, an increased charge on vehicles using alternative fuels, a proposed three percent charge on rental cars and changes the state’s open container law to allow the Tennessee Department of Transportation “flexibility” to use $18 million in existing federal dollars on roads. According to the Office, fuel taxes would be indexed but also capped, to keep up with the rate of inflation.
The Act would reportedly bring in $278 million in new dollars for road projects while “limiting the impact on the average Tennessee motorist to approximately $4 a month.”
The funds acquired would provide funding for 962 projects currently on the docket by TDOT across all 95 counties, including Carter, with an additional $39 million going to cities and $78 million to counties.
Another part of the legislation would allow municipalities to impose a surcharge on their sales-tax rate that would be dedicated to public transit projects, if approved by local voters.
Mark Nagi, community relations officer with TDOT, added that of the listed projects, 28 are geared toward Carter County.
“The plan (Gov. Haslam) proposed would allow 962 projects to be completed, underway, or under contract in the next 12-13 years,” he said. “Otherwise, at current funding levels, it could be 40-50 years before those projects are undertaken.”
TDOT operates with no transportation debit, meaning the department does not go forward on any stage of a project with knowing proper funding is in place.
With the bulk of the projects for the county including local and state bridges being repaired, the biggest expense is the 4.06 mile stretch of State Route 91 to State Route 37 (the Broad Street portion of West Elk) with renovation costs pegged at roughly $22.1 million.
“This project is in development but is awaiting Right of Way funding,” Nagi said. “It will be evaluated along with all other legislative projects in the state when the commissioner prepares the TDOT 3-year work program to be announced this spring for fiscal year 2018.”