Griffey would shift tax surpluses to replace IMPROVE Act
Rep. Bruce Griffey, R-Paris (Photo: John Partipilo)
Not long after Williamson County motorists started buzzing along a highly anticipated, new stretch of Mack C. Hatcher Memorial Parkway in Franklin, a West Tennessee legislator made a move to repeal the IMPROVE Act that provided the money for the project and hundreds more statewide.
State Rep. Bruce Griffey of West Tennessee said this week he is sponsoring House Bill 1650 in an effort to take a financial load off of “working” Tennesseans.
The measure would reduce the tax on gasoline and diesel to pre-IMPROVE Act rates of 20 cents and 17 cents per gallon and shift sales tax revenue to supplement the state’s Highway Fund and local government programs to cover expenses. The measure has no Senate sponsor yet.
“Our folks are facing huge increases doubling the cost of gas pretty much at the pump and it’s hurting their wallet,” said Griffey, a Paris Republican who is not seeking re-election this year.
Gas prices jumped dramatically from lows around $1.25 per gallon during the COVID-19 state of emergency when travel was down a year and a half ago to about $3 per gallon now that travel has picked up.
“This isn’t a huge step, but it’s something,” Griffey said of his proposal, arguing it could cut “a few cents at the pump … for citizens who need it the most.”
He pointed out revenues for the first four months of fiscal 2021-22 are $1.189 billion more than projected. In November, revenues were $286 million higher than expected, giving the state the ability to transfer road construction funding to the sales and use tax.
Passed in 2017 amid great rancor under the administration of former Gov. Bill Haslam, the IMPROVE Act increased the gas tax by six cents, diesel tax by 10 cents and natural gas tax by eight cents over three years as part of a plan to fund 962 road and bridge projects. It also increased vehicle registration fees and put a $100 fee on electric cars.
The act had an estimated $10.5 billion cost to complete all the projects with a schedule to have them under contract by 2032.
In addition, the act reduced the sales tax on food by 1%, cut the Hall income tax on dividends and investments by 1% annually until full repeal in 2021 and reduced franchise and excise taxes on manufacturers. It also enhanced property tax relief payments for low-income elderly and disabled homeowners as well as service-disabled veterans and their spouses.
The issue became toxic during the 2017 session, even though sponsors called it the largest tax break in history. Despite those facets, it wound up costing some supporters their House seats in the next election.
But no real efforts have been made to repeal the gas tax increase until now, and it’s unclear whether Griffey will be able to find the support, though he could gain backers since state coffers are flush with cash.
The act is starting to bear fruit, too.
At the end of fiscal 2021, 14% of the projects were completed and 49% more were under way, according to the Tennessee Department of Transportation.
As the fuel tax increases phased in, revenue collected increased from $150 million in fiscal 2018, to $197 million, $243 million and $244 million in fiscal 2021.
The state has spent $1.6 billion on IMPROVE Act projects, leaving it with $1.3 billion in work left to do, according to TDOT.
Williamson County Mayor Rogers Anderson is among the local leaders who supported the IMPROVE Act when Gov. Haslam pursued it four years ago.
The northwest extension of state Route 397 (Mack Hatcher Parkway), a roughly $45 million project, runs from the northwest side of Franklin a little more than three miles, from south of state Route 96 to east of Hillsboro Road north of Franklin, completing a loop around the city.
“Under Gov. Haslam’s administration, a lot of steps were taken to try to approve more dollars so you build and improve roads,” Anderson said shortly after the Hatcher extension opened.
He noted the project had been floating for 20 to 30 years before it finally received funding with the IMPROVE Act when John Schroer served as commissioner of transportation.
The city of Franklin also kicked in some money for sidewalks and other amenities the state doesn’t fund, Anderson said.
The project was “well-received” from the day it opened in late November, he added.
“I’ve had several people call, excited about being able to get from point A to point B a little bit quicker and not have to go through the downtown sections. It’ll help out,” he said.
State Rep. Dwayne Thompson, a Cordova Democrat, said Wednesday he will vote against Griffey’s legislation if it comes before him.
Thompson, who serves on the House Transportation Committee, noted that some legislators made a push in 2017 to avert the IMPROVE Act’s gas tax increase with a measure to use sales tax money instead to fund road and bridge improvements.
“I’m very skeptical of ever trying to do that,” Thompson said. “For one thing, sales tax is going to go up and down a lot. Right now, we’re doing pretty well. A few years ago, it was not so good, and it could be the same situation in the future.”
Tennessee doesn’t borrow money for road construction and owes no money for those types of projects. And Thompson contends the gas “user fee” provides more stability for road and bridge construction projects because it doesn’t fluctuate as much as sales tax revenue.
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