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VOL. 41 | NO. 3 | Friday, January 20, 2017

Norris steers clear of pushing fuel tax as he eyes run for governor

By Sam Stockard

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Senate Majority Leader Mark Norris is set to tag-team sponsorship of a comprehensive tax plan designed to bolster Tennessee’s transportation fund.

But “more than mulling” a run for governor in 2018, the Collierville Republican is staying away from talk about fuel-tax increases.

“We’re still working on what the legislation might look like. I’ve told folks I’ll be proud to sponsor the tax-cuts part of the bill,” says Norris, who as majority leader typically carries Gov. Bill Haslam’s administration bills.

Haslam initially said his IMPROVE Act proposal would be contained in one bill. His office clarified the matter, saying the major components of the proposal will be contained in one bill with one to two supporting bills written separately for statutory reasons.

In order to “have the debate” but calling the measures a “revenue swap,” Norris says he will file the necessary legislation with Sen. Jim Tracy of Bedford County on the governor’s proposed IMPROVE Act. Tracy confirms he will participate in moving the initiative.

The Republican governor wants to attack a $10.5 billion list of road and bridge projects through several fuel-tax and transportation fee increases totaling $278 million to be offset by reductions in grocery and franchise and excise taxes at a total cost of $270 million.

The plan would tack seven cents on Tennessee’s 21.4-cent-per-gallon gas tax and 12 cents on the state’s 18.4-cent diesel tax, in addition to adding $5 to registration fees for the average car.

The proposal would put a yearly user fee on electric vehicles and increase charges for vehicles using alternative fuels. A 3 percent charge would be placed on rental cars, and the Legislature would need to amend state law and prohibit open containers in vehicles to tap $18 million in federal dollars the U.S. Department of Transportation is restricting to other uses in state government.

Fuel taxes would be tied to the Consumer Price Index to keep up with inflation, though the amount would be capped. Haslam also is offering a method for holding referendums to raise funds for local mass transit projects.

To soften those increases, Haslam wants to cut half a percent on the 5 percent grocery tax to bring in $55 million, reduce franchise and excise taxes on businesses by a total of $113 million and trim the Hall tax on investments by 3 percent over the next two years. The Hall tax is to be phased out by 2022.

Making the case

Norris, who hopes the measures are structured as “revenue neutral,” says he and Gov. Haslam are framing the proposal differently.

“I’m worried about keeping people safe. I’m worried about the 20,000 bridges, a significant portion of which are unsafe,” Norris says. “When I talk to my constituents, they want to have that discussion. Jobs and economic development follow from behind. But those are all important issues that need to be discussed.”

Shelby County has 20 projects on the state list, including six bridges, at a total cost of about $600 million.

Several legislators, primarily House Republicans, have come out against the proposal, saying the state should use a $1 billion recurring surplus and $1 billion non-recurring surplus projected for the coming fiscal year to pay for road and bridge work.

Norris says he understands House members’ concerns and wants to use those surpluses to “reorient our resources.” Asked if he’s worried about the proposal failing in the lower chamber, he says, “if it dies in the House, it dies.”

Tracy, meanwhile, says he is encouraging House members to keep an “open mind” on the matter and listen to the governor’s State of the State address set for Jan. 30 before they oppose the plan.

“I believe in what we’re trying to do to sustain our roads and bridges,” says Tracy, a Bedford County Republican who previously chaired the Transportation Committee and is serving as speaker pro tempore this session.

Tracy says he agrees with the governor’s position that gas and diesel tax should be used for road and bridge work while general fund money should be spent on other priorities.

The governor also is asking for $120 million from the general fund to be returned to the transportation fund after it was taken in 2007 to balance the budget.

Short of saying he supports the seven-cent and 12-cent fuel-tax increases, Tracy says he is backing “measures to fund our roads and bridges” while noting there are still some details to negotiate.

The governor’s plan calls for funding 962 road and bridge projects in all 95 counties, with every project to be complete or under way by 2030.

Calling it a matter of jobs and traffic congestion, Tracy says it makes sense to put the burden on fuel taxes because 30 percent of the bill will be paid by out-of-state drivers and a chunk of the money will go to local governments. Through the gas tax, an average motorist’s bill will go to $18 a month from $14, according to Tracy.

Sam Stockard is a Nashville-based reporter covering the Legislature for the Nashville Ledger and Memphis Daily News. He can be reached at sstockard44@gmail.com.

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