By Andy Sher via Times Free Press
Supporters of Gov. Bill Haslam’s transportation funding bill zigzagged past opponents in a key House panel Wednesday and emerged with an altered plan they nonetheless control and can change down the road.
Transportation Subcommittee members approved the bill, but minus the Republican governor’s proposed gas tax increase. Instead, they borrowed an idea from a rival plan to fund highway and bridge improvements using a percentage of state sales tax revenue.
Then when the rival plan, sponsored by Assistant Majority Leader David Hawk, R- Greeneville, came up for a vote, it failed.
The maneuvering allowed Haslam’s stalled IMPROVE Act to get past what may be its greatest obstacle and survive to be amended later in a more favorable committee.
Haslam wants to raise the gas tax by 7 cents per gallon and diesel by 12 cents to begin tackling an estimated $10.5 billion backlog of nearly 1,000 highway and bridge projects in all 95 Tennessee counties.
Proponents got a boost when House Speaker Pro Tem Curtis Johnson, R-Clarksville, who can break ties in any standing committee, did so in the eight-member subcommittee. That meant the bill squeaked by in a 5-4 approval.
Hawk then pressed his own bill, dryly observing that since Haslam’s bill got approved with his provision, he expected “a unanimous vote” for his “simple plan.” But his bill went down on a 5-3 vote.
Haslam’s spokesman, David Smith, later called the panel’s action “the first step in a thorough legislative conversation about how we as a state pay for our roads and bridges.”
“We look forward to continuing to work with the General Assembly on a fiscally responsible plan to provide a safe and reliable transportation network that remains debt-free for the next generation of Tennesseans,” Smith added.
Opponents, though, are steaming. Americans for Prosperity-Tennessee brought some 50 T-shirt-wearing members to oppose the legislation, along with someone wearing a gas can costume.
AFP-Tennessee opposes Haslam’s idea to raise fuel taxes. Group director Andy Ogles said AFP-Tennessee had been hoping the bill would be killed in committee.
“My guess is [the Haslam bill] will go back to its original form” with the gas tax increase, Ogles said later.
He went on to charge that “this was Speaker [Beth] Harwell helping the governor with the gas tax. We’ll see how it plays out.”
Harwell spokeswoman Kara Owen said her boss “has said all along that all the proposals would get a fair hearing throughout the committee process, which is exactly what happened today. There are still many more hurdles ahead, and we anticipate the bill will continue to change throughout the process.”
Haslam’s package, which includes increases or new fees in other areas, would raise an estimated $278.5 million for the state and another $117 million for cities’ and counties’ road programs.
Because of huge surpluses in nonhighway areas, the governor proposes cutting $270 million in taxes that support the general fund, which pays for areas ranging from education to prisons.
Opponents got their first surprise in the subcommittee when Rep. David Alexander, R-Winchester, who doesn’t support raising fuel taxes, successfully moved to insert Hawk’s idea of using a quarter percentage point of Tennessee’s 6 percent sales tax to fund the plan.
Alexander’s amendment included Haslam’s tax cuts, including $116 million in reduced corporate taxes for manufacturers and a half-percentage-point reduction in the sales tax on groceries.
The tie-breaking Johnson may have had his own motivation, because Hawk’s plan contained none of the Haslam bill’s tax-cutting features. The cuts include reducing manufacturers’ franchise and excise taxes by $113 million.
The day before, Johnson appeared with Haslam and South Korean manufacturer LG to announce the company will site a $250 million washing machine factory in Clarksville that will employ 600 workers.
The governor said in response to a reporter’s question that the state had discussed the potential corporate tax cut with LG but noted it was subject to approval by the General Assembly.