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VOL. 41 | NO. 7 | Friday, February 17, 2017

Haslam: First vote on gas tax won't signal final version

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NASHVILLE (AP) — Republican Gov. Bill Haslam says he's unconcerned that Tennessee lawmakers may try to make significant changes to his signature road funding plan when it comes up for its first committee vote Wednesday.

What's important is that the legislation aimed at tackling the state's more than $10 billion backlog of road and bridge projects emerges from the House Transportation Subcommittee, Haslam told reporters.

"This isn't an end step either way," Haslam said. "This is the first step of what I think will be a fairly long process, so I'm not certain I would call today's vote either way determinate."

Fellow Republicans have been most wary of Haslam's proposal to fund most of his plan through the state's first gas tax hike since 1989.

The governor wants to increase the state's 21.4-cent tax on each gallon of gas by 7 cents and the 18.4-cent tax on diesel by 12 cents. Haslam proposes balancing the estimated $280 million that would be generated for transportation projects with cuts of the same amount in other areas, such as the sales tax on food, business taxes on large manufacturers and the tax on earnings from stocks and bonds.

A rival plan by Republican Rep. David Hawk of Greeneville would instead avoid any tax increase by dedicating 0.25 percent of the state's sales tax revenues to road projects. Haslam and Senate Republicans have expressed serious doubts about the wisdom of redirecting general fund money to transportation projects that the state has traditionally paid for mainly through fuel taxes.

The panel could advance either, both or none of the proposals. But Haslam appeared confident that some version of the measure would be approved.

"If nothing comes out at all, period, then obviously we won't have any kind of new road plan for next year," he said. "My sense is that something will come out, and again it's the first the first step in a fairly long journey."