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VOL. 41 | NO. 12 | Friday, March 24, 2017

Haslam's road funding proposal moving ahead with 'broad support'

By Sam Stockard

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With hardly a peep of discontent from lawmakers, the governor’s IMPROVE Act containing fuel-tax increases and a host of tax cuts moved out of the House Local Government Committee today.

It heads next to a House Finance committee, where the bill’s sponsor, Rep. Barry Doss, predicts it won’t face a fight.

“I think there is very, very broad support,” said Doss, noting most scuffling between House members took place in Transportation committees, in part because a measure was inserted to give veterans tax relief, “which alienated some people.”

Doss, a Leoma Republican from Maury County, said he believes nearly every senator and House member wants to “fix” roads and bridges across the state and points out 962 projects costing $10.5 billion are included in the bill.

“They know that their counties back home are gonna raise property taxes if we don’t do something. They know we have a backlog in our state,” Doss said.

The bill raises $355 million for the state transportation fund and city and county governments to fund road and bridge projects using a six-cent gas tax increase and 10-cent diesel tax increase phased in over three years, along with an eight-cent increase on alternative fuels. Motor vehicle registrations also would be increased $5 to $10 depending on the type of vehicle, and electric vehicles would see a $100 fee.

To offset those increases, the bill would cut the sales tax on food to 4 percent from 5 percent, in addition to decreasing franchise and excise taxes on businesses and manufacturers and phasing out the Hall income tax on interest and dividends, as approved in 2016.

Local governments also would be given authority to hold referendums to raise taxes for mass transportation projects.

“This is another step in the process and clearly the bill had the support of the committee, so we’re pleased with the result,” said Stephen Smith, the governor’s legislative policy advisor.

Transportation Commissioner John Shroer said afterward, “It’s the largest single tax cut in the history of the state of Tennessee.”

Senate Majority Leader Mark Norris, whose amendment on the IMPROVE Act is now attached to the House bill, declined to move the measure in the Senate Finance, Ways & Means Committee today. Norris said Senate members didn’t want to get too far ahead of the House.

“It sounds as though maybe simultaneously this morning the House is becoming increasingly comfortable, and I’m very appreciative of that,” Norris said.

The Collierville Republican also is pushing a high-priority bridge replacement program, in which he says the governor’s office is willing to pay 100 percent of the cost of repairing and replacing small bridges in counties statewide.

Norris is concerned a large number of those bridges are causing safety problems and pointed out the state is nearing the 30-year anniversary of the deadly Hatchie River bridge collapse, which took place in Lauderdale County, part of his district.

Despite the bill’s movement, the conservative group Americans for Prosperity continues to criticize the IMPROVE Act, contending it remains a tax increase and accusing lawmakers such as Norris of inserting the provision for veterans tax relief to make it seem as if it’s an overall tax reduction.

AFP spokeswoman Tori Venable says a Hall tax phase-out should not count toward tax reduction because it was approved under a previous legislature. She also contends the veterans tax relief is being used to increase the tax reduction for political cover.

“It’s actually not even revenue neutral at this current state it’s in. So if we could get to a place where it was actually a tax cut you might see us come on board,” Venable said.

Norris, however, said he is not counting veterans property tax relief as part of the overall tax reduction but put it in his amendment in an effort to pass it this year.

Costing about $5 million annually, the Senate version adds a measure for veterans and elderly/disabled property tax relief by increasing to $135,100 from $100,000 the property value that can be counted toward tax relief for a veteran’s home and to $27,000 from $23,500 the amount for the elderly and disabled. Those would be adjusted for inflation annually.

The House version of the amendment pushes the amount of veterans’ property tax relief to $175,000 for a total cost of about $7 million.

Doss, though, said he would like to see the veterans tax relief removed from the IMPROVE Act as it moves forward because he believes is a separate issue. Norris said he is willing to talk to House members and notes his main concern is ensuring veterans receive a tax break.

Sam Stockard can be reached at sstockard44@gmail.com.