On Thursday, February 16th, State Senator Mae Beavers held a town hall meeting at the Macon County Welcome Center. The purpose of Beavers’ meetings was to discuss Governor Bill Haslam’s proposed seven cent raise in the state gas tax.
“There is not enough information out there on the gas tax that is proposed,” said Senator Beavers. She began by mentioning other points of the proposal that would go into effect in addition to the gas tax. “First of all, it would cut business taxes for manufacturers, $113 million. It’ll cut the sales tax on groceries by half a percent, which is $55 million. It cuts the Hall income tax 1.5 percent this year.”
Beavers said the Hall income tax, which, according to the Tennessee Department of Revenue website, is a tax that “is imposed only on individuals and other entities receiving interest from bonds and notes and dividends from stock… (and) does not apply to the first $1,250 of income reported on each individual return or the first $2,500 of joint income reported on a jointly filed return,” is “not a fair one for (Haslam) to count in his plan” due to the fact that it is being phased out due to prior legislation.
In addition to increasing the “road user fee,” also referred to as a gas tax, by seven cents per gallon of gasoline, the proposal also increases the tax on diesel by twelve cents per gallon. Beavers explained that car registration fees would also increase under the proposal by $5 for “the average passenger vehicle,” it places a $100 annual fee on electric vehicles, and increases charges on vehicles using “alternative fuels.”
“It places a 3 percent charge on rental cars, so if you have a wreck and you have to go rent a car, it’s going to cost you more,” said Beavers. She continued that it “changes the open container law to allow TDOT flexibility to use $18 million in existing federal funds that, right now, are designated for other purposes.” Beavers explained that the passing of an open container law in the state would allow the Tennessee Department of Transportation to use the $18 million for roadwork.
Beavers also pointed out that the proposal would “index the fuel taxes to the Consumer Price Index to keep up with the rate of inflation.” She continued that the proposal would lead to “a tax increase without a vote of the legislature.”
Beavers added that, had the indexing started in 1989, the last time the gas tax was raised, “gas would be thirty-nine cents a gallon now, or a total of 57.4 cents per gallon in Tennessee if they had started indexing back then according to the Consumer Price Index,” she continues. “You can see what they’re doing, they’ll be able to raise gas taxes now on out, without a vote of the legislature.”
“(The proposal) brings in 278 million new dollars to fund 962 transportation project across 95 counties with 52 percent of the projects going to urban areas and 48 percent to rural areas. It provides an additional $39 million for cities and $78 million for counties. It allows for municipalities, only if approved by the local voters through referendum, to impose a surcharge on their sales tax rate that will be solely dedicated to public transit projects,” Beavers noted that she believed public transportation is “what this has been about all along.”
Beavers said directly that she was against the Governor’s proposal, noting that other plans had been proposed, such as one by Representative David Hawk. She stated that, despite the percentage of tax coming off of groceries, Tennesseans would still be paying more.
Senator Beavers also invited Shawn Hatmaker with the non-profit group Americans for Prosperity to speak at the meeting. Hatmaker conceded that there was a “short fall” in TDOT’s budget, but that he believed the problem could be fixed without raising the gas tax.
“When I think of the government, they have a tendency to grab the lowest hanging fruit,” he said. “TDOT doesn’t have enough money so we have to raise the gas tax, but when you do your budget at home and when I do my budget at home, it requires thought… We have to use our brains, we can’t just say, ‘I want this so we have to raise this or spend it elsewhere,’ we have to think through the process and I don’t think they have done that with this plan.”
Hatmaker also added, “While they’re wanting to cut these taxes at the same time they’re raising them. Another point, this entire time they’ve claimed that its revenue neutral, but it’s not. The amount of taxes that it cuts does not equal the amount that it’s raising.”
Hatmaker also commented on the Governor’s inclusion of the Hall income tax in his plan saying, “The Hall income tax is going away no matter what the Governor does, period… The whole Hall income tax cut is completely disingenuous. No matter what he does, that tax is going away.” Hatmaker, like Senator Beavers, said he was against the plan, citing “a plethora of other plans out there that will get the job done. David Hawk has a plan that we support.”
In his conclusion, Hatmaker took issue with referring to the tax as a “user fee.” He explained a user fee as something that would affect only the people using the roads. He also gave the example of someone mowing their lawn or working their field with a tractor. “If you’re doing that, you’re not using the roads, but you’re paying the gas tax,” he said.
Jackson County citizen Anthony Horseman said that he felt the gas tax was a, “rural versus urban problem… It is metropolitan versus us country folk.”