Capitol Hill Conversation: Haslam's Gas Tax Plan Hits Some Bumps

Apr 7, 2017

It was beginning to look last week like the road was finally beginning to clear for Governor Bill Haslam’s transportation plan and gas tax hike.

Then, some legislative leaders from the governor's own party cut in.

Now, the Tennessee legislature is set for what could be a make-or-break week.

Nashville Public Radio's Jason Moon Wilkins sat down with statehouse reporter Chas Sisk to lay out the route ahead.

JMW: It seemed like Haslam's transportation plan, after some initial hurdles, was set to move on, but this past week saw last minute — and really a bit unexpected — backlash. What happened there?

CS: What happened is some Republican leaders in the state House of Representatives announced they weren’t quite ready to come along.

So, here’s where things stand. Haslam is offering a 6-cent a gallon increase to the gas tax. That’s down from 7 cents that he first proposed. And an increase of 10 cents a gallon for diesel. And that was originally 12 cents.

Those increases at the pump would be combined with other tax cuts. The sales tax on food would go down by a penny. Supporters of the governor’s plan says that will offset the gas tax increase. Plus there are tax cuts on investments, manufacturers and property tax relief for veterans and the elderly.

And it was beginning to look like those sweeteners were going to be enough to get the plan through the legislature. Then we heard on Wednesday that House Speaker Beth Harwell and other top Republicans in that chamber are working on an alternative proposal that they’ll unveil this week. So that’s a significant kink in the works.

JMW: House Speaker Beth Harwell — she’s not been a vocal opponent of this up to this point. Do you feel this is a political move? Many expect her to possibly run for governor, and with Sen. Mark Green maybe filling a Trump cabinet post, could this be Harwell's attempt to appeal to his conservative voters?

CS: That seems to be the consensus. Harwell herself hasn’t said much beyond issuing a statement, but she has been testing the waters for a run for governor.

The situation with Sen. Green is a factor. If he does drop out of the race, it’ll create an opening for someone.

But I’m not so sure Harwell is going to be the one to pick up that conservative mantel. She’s generally been seen as a moderate throughout her legislative career. As speaker, she’s taken some heat for tanking Gov. Haslam’s plan to expand Medicaid, Insure Tennessee. And if this transportation plan fails, she’ll again take the credit or the blame, depending on your perspective.

Now, whether that’s enough to convince the tea party wing to support her, I really don’t know.

JMW: The Republicans in the Senate definitely shot back at Harwell. Does this set up a House versus senate deadlock on the plan?

CS: Senate Republicans are definitely not happy about it. Here’s what Majority Leader Mark Norris said when reporters asked him last week about Harwell’s position.

NORRIS: There’s a fine line between indecision and deception.

CS: Norris, I should point out, is another potential candidate for governor, so a little back and forth between the two of them.

But there is a concern among Senate Republicans that the House could pass a plan that’s so far apart from the one that they and Haslam support that there’s no way for the two chambers to come together. And if that happens it could scuttle any new road-funding plan.

Keep in mind, it’s been nearly three decades since Tennessee raised the gas tax. And that’s because it’s tough to get lawmakers to agree on a way to do it.

JMW: OK, there’s the political aspect of this, but there’s the practical effects of this legislation. Gov. Haslam has insisted the plan is a net positive for Tennessee taxpayers. It’s even been backed by one of the most noted national anti-tax groups. Do you think the numbers bear that out?

CS: Well, it depends on your household. I took a calculator out and figured what the impact would be on mine. My family would probably pay $20-$30 more a year for gasoline, and we’d save about that much on groceries.

Some families will drive more. Some will spend less on groceries than mine. But I did ask one longtime holdout, Chattanooga Republican Gerald McCormick, about this last week. He’s come around to Haslam’s plan specifically because he believes most households will be no worse off. But, you know, every lawmaker is going to have to decide for themselves.