HASLAM’S ‘REALLY BIG DEAL’
Whether it took several significant changes by the state Senate earlier this month or the blessing of an anti-tax organization earlier this week, Tennessee Gov. Bill Haslam’s gas tax proposal is back on the road again.
It had swerved onto the shoulder when some General Assembly members insisted transportation funds for interstate, highway and bridge construction, and road maintenance, be paid for — at least in part — by surpluses in sales tax revenue.
After an 11-7 House Transportation Committee vote and unanimous approval of Haslam’s IMPROVE Act by the Senate State and Local Government Committee, bills in both houses are largely the same.
Meanwhile, the nod from the Americans for Tax Reform organization couldn’t have hurt. And it may have given worried conservative legislators cover to vote for it after the group’s founder said the proposal represented a “net tax cut.”
Grover Norquist, founder of the group to which many politicians have shown fealty by promising not to vote for tax increases, said in a letter to state House and Senate members that the proposal does not violate legislators’ pledge not to raise taxes.
Haslam had presented the bill as revenue neutral, with cuts in sales tax on food, business taxes and the Hall tax offsetting hikes on gasoline and diesel fuel, but the Senate made it more palatable.
For one thing, the upper chamber removed the portion of the proposal that linked the fuel taxes to inflation. That part had concerned us as well. Though inflation is largely in check now, we remember the Jimmy Carter-era rates of 14.8 percent less than 40 years ago.
The changes also phase in the increases in fuel taxes — 6 cents per gallon on gasoline and 10 cents per gallon on diesel — over three years, double the proposed cut in sales tax on food to a full percentage point, axe a new tax on rental cars, and restore some state aid on local property taxes for veterans and the elderly. Fuel taxes in Tennessee haven’t been raised since 1989. Haslam, whose administration sought the input of the tax reform organization on his proposal after it supported similar increases in New Jersey and South Carolina, said Norquist’s blessing was “a really big deal.”
“This is somebody who’s kind of staked his whole thing on we should never have tax increases,” Haslam told The Associated Press. “Whether you agree or not, the fact [is] the founder of that movement — who had people sign no-new-tax pledges — says this is a not a tax increase.”
Previously, the state chapter of Americans for Prosperity had come out against Haslam’s measure.
But we believe Haslam has made his case and admire the fact he sought to do it revenue neutrally. We still want to hear about any other ideas on the table but hope the bill would have enough support to pass should it reach the House and Senate floor.