Fiscally conservative Improve Act is about safety and jobs
If I asked you who said the following, minus the federal references, you might think it was Governor Haslam:
“So, what we’re proposing is to add the equivalent of five cents per gallon to the existing federal highway user fee, the gas tax. That hasn’t been increased for the last 23 years. The cost to the average motorist will be small, but the benefit to our transportation system will be immense… The program will not increase the federal deficit or add to the taxes that you and I pay on April 15. It will be paid for by those of us who use the system, and it will cost the average car owner only about $30 a year. That’s less than the cost of a couple of shock absorbers.”
That’s Ronald Reagan, the father of modern conservatism, advocating for his groundbreaking 1982 transportation bill that included a gas tax increase. The slight differences in the amounts in Reagan’s bill as compared to the amended version of Governor Bill Haslam’s IMPROVE Act, is that the increase proposed is six cents and Tennessee’s gas tax has not been raised for 28 years. And, while the cost to the average motorist will be slightly more at $48, it is much less today than in 1982 as the price of shock absorbers have increased with inflation.
But unlike the IMPROVE Act, Reagan did not more than offset the increase with a package of sweeping tax cuts that save consumers more money at the store than is increased at the pump. The IMPROVE Act, as amended by the Senate and adopted by the House Transportation Committee, cuts the food tax and Hall Income Tax by a full percentage point, provides property tax relief for veterans and the elderly disabled, and reduces franchise and excise (F&E) taxes on manufacturing businesses, resulting in a net tax break for Tennesseans. The F&E tax reduction will boost job growth by making the Tennessee more competitive with neighboring states. It also decreases the governor’s original proposal by one cent on a gallon of gas, phases it in, and removes provisions to index the tax to adjust for inflation and to place a surcharge on rental cars.
Reagan was known as a tax cutter. Likewise, our legislature has cut $438 million in annual taxes since 2011, and if the IMPROVE Act is approved, that amount will climb to about $540 million. Although Reagan was vehemently opposed to raising general taxes, he saw the need to increase highway user fees, which he correctly referred to them, to ensure that America’s roads were safe and invited job growth. I agree and that is exactly the crossroads that we are at in Tennessee.
It’s not just about potholes. It’s about public safety. Some of our state’s bridges are in such disrepair that firetrucks cannot cross them to get to a house afire and school buses must travel over them one axle at a time. This is not acceptable. If the state does not solve the problem, locals will – through a property tax hike. About 40 percent of the new money in this plan will go to city and county governments to help make those needed repairs at the local level to help avoid property tax increases.
In addition to public safety, our transportation infrastructure is critical to job growth. An annual $278 million increase in highway and bridge construction investment in Tennessee would have an immediate impact on all sectors of the state’s economy, generating about 6,217 jobs.
Some opposed to the IMPROVE Act have made the argument that gas tax money has been diverted from the highway fund. That is correct. I disagreed with this practice and sponsored legislation in 2009 and 2016 to end it and restore the funds. The return of this diverted money helps, but is far short of solving the problem which stems from the fact that fuel efficiency, aided by the emergence of electric and hybrid-fuel vehicles, has slowed growth of fuel demand.
Infrastructure is a basic function of government. We have been blessed in Tennessee with a pay-as-you go road system that relies on user fees, rather than general fund taxes, tolls or debt financing. It is a sound fiscal practice which contributes to the Tennessee’s AAA credit rating and accounts for the state’s recognition as being a national leader for financial management. Earmarking revenues from our sales tax to be used for roads would likely be viewed unfavorably by the ratings agency and would be a departure from the long-held belief that those who travel the roads should pay for the roads, including motorists from outside of Tennessee.
The IMPROVE Act is about preserving for future generations of Tennesseans a highway system that is good or better than the one left to us by our parents. It is about making our roads safe and inviting to new job growth, while keeping our state’s conservative financial practices the top rated in the nation. It is without a doubt the most conservative approach and it deserves the widespread support of Tennesseans.
Senator Tracy represents Senate District 14 which consists of Bedford, Lincoln, Marshall, Moore and parts of Rutherford Counties. More information and a photo can be found at: http://www.capitol.tn.gov/senate/members/s14.html