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VOL. 41 | NO. 15 | Friday, April 14, 2017

Harwell 'leaning' toward support of governor's gas tax bill

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NASHVILLE (AP) — House Speaker Beth Harwell, whose support of efforts to strip a gas tax hike out of Republican Gov. Bill Haslam's transportation funding proposal had cast doubt about the bill's prospects, said Thursday that she is now 'leaning' toward voting for the proposal.

Harwell, a Nashville Republican mulling a bid for governor next year, had publicly taken a hands-off approach to the measure as it worked its way through the legislative process. But she caught the governor's office and her Senate counterparts by surprise last week when she announced she was backing a last-minute bid to change the funding mechanism.

In brief comments to reporters after Thursday's House floor session, Harwell acknowledged that efforts to amend the bill on the floor next week appear poised to fall short. When pressed whether she'd support the bill if it still includes the gas tax provision, Harwell said she wouldn't rule it out.

"I'm trying to decide that," she said. "I'm leaning that way."

Supporters argue the proposal would cut more taxes than it would raise through fuel tax increases. Several House committees and Senate Republicans have rebuffed efforts to instead pay for road and bridge projects by drawing sales tax revenue from the general fund.

Harwell spokeswoman Kara Owen said the speaker's comments reflect the importance passing a bill to boost funding for road and bridge projects around the state.

"She's just keeping an open mind because this is such an important issue," Owen said.

The bill has been scheduled for a full House floor on Wednesday morning, and the Senate could follow suit as early as that afternoon.

The measure would raise the state's 21.4-cent tax on each gallon of gasoline by 6 cents over the next three years. The current 18.4-cent tax on diesel would be raised by 10 cents over that same timeframe. It would also $5 to the registration fee for cars.

The about $350 million the measure would add to road funding would be offset by a projected $400 million in cuts to other taxes. They include a 20 percent reduction in the sales tax on groceries, a $113 million cut in corporate taxes paid by manufacturers and dialing back the tax on earnings from stocks and bonds by 1 percentage point.

Haslam says the new road funding is needed to begin chipping away at a $10.5 billion backlog of road and bridge projects across the state. The bill lists nearly 1,000 projects that would be funded with the new revenue.

The bill also includes a provision to allow the state's biggest counties to hold referendums on raising local taxes to pay for mass transit projects.