Haslam’s Gas And Diesel Tax Increase Bill Advances

Tennessee Governor Bill Haslam’s bill to increase taxes on gas and diesel fuel was approved in both the House and the Senate this week.

The legislation would increase taxes on gas by 6 cents and on diesel fuel by 10 cents over the next three years. The tax increases are projected to raise $350 million for the state. This marks the first gas tax increase in 28 for Tennessee.

The tax revenue will be used to pay for improvements to the state’s roads and bridges. Tennessee reportedly has almost $11 billion worth of infrastructure projects that need to be completed.

While the bill increases taxes on diesel and gas, it also cuts taxes for manufacturers and drops the sales tax on grocery items.

Haslam has argued that his bill is a “pay as you go” plan that would make truckers and out of state drivers pay for infrastructure repairs on the roads that they use.  Haslam has stated that the legislation is supported by a trucking industry willing to invest in better roads: ““They’re the ones who do the math, and they’re the ones who say is it worth it for me to pay more and have better roads so there’s less wear and tear on my vehicle and my drivers and my products get where they should be on time.”

The House and the Senate passed slightly different versions of the bill, so the Senate-passed version will go back to the House for approval before Haslam can sign it into law.