Local gas tax not answer for cities

Robert Houk • Jan 14, 2013 at 9:04 AM

Municipal leaders want Tennessee lawmakers to approve a 5-cent, local-option tax on gasoline to fund area highway projects. That’s a bad idea because local government officials have an existing and elastic tax option already at their disposal for financing such projects.

What city leaders don’t have, it seems, is the political backbone to use it. Towns and cities can now raise property taxes for such purposes, but elected officials are often reluctant to do so. Instead, they turn to such regressive measures as increasing sales taxes or implementing wheel taxes.

City officials from Bristol, Johnson City and Kingsport recently pitched the idea of the local option gas tax to Upper East Tennessee’s delegation to the state General Assembly. That delegation, by the way, includes the new chairman of the state House Local Government Committee — the powerful Rep. Matthew “Boss” Hill, R-Jonesborough.

Kingsport Mayor Dennis Phillips — who joked to attendees that his city manager, John Campbell, has been on a spending spree — told lawmakers that “sooner or later” local municipalities will be forced to handle a greater load when it comes to maintaining existing roads and building new ones.

“If we’re not going to raise taxes or sell bonds, somewhere down the road we will have a problem,” Phillips said. “If we could eliminate all the (news media) and if you raise taxes on gasoline 5 cents, the public wouldn’t know it because it goes up. About three weeks ago, it went up 13 cents in one day.”

I don’t know whether to congratulate Phillips on his candor, or castigate him for his subterfuge. In truth, motorists who are forced to fill up at least once a week are all too painfully aware of every price fluctuation at the pumps. Attaching a local tax to the price of gas, clandestinely or otherwise, is simply bad public policy.

Tennesseans already pay 21.4 cents in state taxes for every gallon of gas they pump. That’s in addition to the 18.5 cents per gallon they pay to the federal government.

According to the Tennessee Department of Transportation, the state’s current gas tax yields more than $665.7 million per year. That 21.4 cents is divided thusly:

n About 7.9 cents, or $245.5 million, goes to cities and counties.

n Nearly .7 cent, or $22 million, goes to the state’s General Fund.

n Roughly 12.8 cents, or $398.2 million, goes to TDOT to maintain and build roads and bridges.

There has been talk in the past few years about the state raising its share of the gas tax. TDOT has seen its funding for new road construction stretched to the limit, which has prompted legislators to look at other options for funding state highway and bridge projects. One of those solutions has been the equally reprehensive concept of toll roads.

I don’t think the idea of hiking the state gas tax, or allowing local governments to attach their own, is going to find any traction this year in the Republican-controlled General Assembly. Neither do I expect Tennessee Gov. Bill Haslam, a Republican who has some familial knowledge of the petroleum industry, will follow the lead of his counterpart in Virginia and abolish the state’s gas tax.

Robert Houk is Opinion page editor for the Johnson City Press. He can be reached at rhouk@johnsoncitypress.com.

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