Harwell seeks alternative to Haslam’s gas tax,
NASHVILLE — Blindsiding fellow Republicans, including Gov. Bill Haslam and Senate Speaker Randy McNally, House Speaker Beth Harwell acknowledged Wednesday that she and some GOP leaders are seeking an alternative to Haslam’s proposed gas tax increase.
Harwell’s spokeswoman Kara Owen confirmed the lawmaker has been talking with Assistant Majority Leader David Hawk, R-Greeneville, and two other GOP leaders to develop an alternative that does not include a gas tax increase.
“The details have not been fully developed yet,” Owen said in an email, “but they are working diligently to offer something. [Harwell] knows members have a desire to find a solution for our transportation and infrastructure funding, and is encouraged by that agreement.
As Leader Hawk mentioned in committee, an amendment would be ready by next week’s Finance Committee meeting.”
Hawk, whose effort to divert existing sales taxes to the highway fund was shoved aside earlier this session in committee, revealed the effort as Haslam’s yetagain revised bill cleared the House Budget Subcommittee earlier in the day.
The move comes as Harwell prepares for an expected 2018 gubernatorial bid to succeed the term-limited Haslam. The speaker has faced persistent criticism from the GOP’s right- wing members.
Asked about the latest development, Budget Subcommittee Chairman Gerald McCormick, R-Chattanooga, noted he had heard Hawk’s comments in the subcommittee, but he was taken aback at the speaker’s office’s statement.
“I think if you want to kill the bill, just come out and try to kill the bill,” McCormick said. “And I think that would effectively kill the bill in my opinion.”
Senators won’t go for it, McCormick predicted, a view that found quick confirmation from Senate Speaker McNally.
Haslam spokeswoman Jennifer Donnals said the governor’s office hadn’t seen or heard of Harwell’s plan.
But, “the IMPROVE Act has been out there for four months,” she said. “Various other plans have been presented and not received the necessary support.”
Donnals added that the bill “has been thoroughly vetted, passing seven committees, including the latest one unanimously today. IMPROVE delivers 962 needed projects across all 95 counties and is a tax cut for Tennesseans.”
The bill raises gas and diesel taxes by 6 cents and 10 cents respectively over the next three years.
But it also reduces the state’s sales tax on groceries from 5 percent to 4 percent, benefits corporate manufacturers with a change in a business tax and continues lowering the Hall Tax on investments by a percentage point.
The effect is a net reduction on overall state taxes, although proponents acknowledge associated fees such as boosting vehicle registration charges by $5 on cars raises the overall impact slightly.
McNally said in a statement he has “been involved in no discussions regarding an alternative amendment, as you describe it.”
He said the Senate’s IMPROVE Act version, awaiting action next week in the upper chamber’s Finance Committee, is “a clear and undisputed tax cut for Tennesseans and offers additional cuts for the veterans and the elderly.
“These crucial and unprecedented cuts are only guaranteed funding in the current plan,” McNally added. “This is why it has my unequivocal support. While we are certainly open to discussions with our friends in the House, I believe the basic structure of the plan as amended is sound.”
McNally said the state has over-collected revenues in the state’s general fund, which pays for most non-highway related expenses. But the state has under-collected for the road fund.
“It is time to restore the balance,” he said.
In its earlier meeting, House Budget Finance Committee members took a Senate plan provision from the bill, which partially restores property tax relief to veterans and some elderly Tennesseans, and puts in a stand-alone bill, which they first passed before taking up the IMPROVE Act.