VOL. 132 | NO. 59 | Thursday, March 23, 2017
Two Memphis Democrats Help Move Amended Fuel-Tax Bill Along
By Sam Stockard
NASHVILLE – Two Memphis legislators helped move the governor’s IMPROVE Act and fuel-tax increases out of the House Transportation Committee Tuesday, March 21, saying they support a section allowing local governments to raise funds separately for mass transit.
Democratic Reps. Barbara Cooper and Johnnie Turner both supported an amended bill that passed 11-7 after a good deal of political wrangling in the Republican-controlled House over the last three weeks.
Cooper said she voted for it after talking to constituents for two years, including “working people” who don’t have adequate transportation.
“So I just felt that I needed to at least allow them to have the opportunity to have some more funding so they can have bus routes for seniors,” Cooper said. “Transportation’s a way out of poverty. If you don’t have transportation, you don’t have a way to work. Seniors can’t get to the doctor.”
Part of the legislation backed by Gov. Bill Haslam enables local governments to hold referendums on increasing a variety of taxes to raise funds for mass transportation projects. Cooper and Turner both say the Memphis bus system is in dire need of more buses to increase routes.
Turner said she would not have voted for the bill if other amendments had been placed on it. Those included a measure to take about $375 million from sales taxes for the purchase of car sales to fund transportation projects.
“But in the final analysis, based upon the information I had, I decided at this point it was not only best for Tennessee but particularly for what it could do for the local transit system in Memphis in terms of having the option to raise additional funds for our transit system, which has been underfunded for so long,” Turner said.
As amended, the bill mirrors legislation introduced last week by Senate Majority Leader Mark Norris. It raises $355 million for the state transportation fund and city and county governments to fund road and bridge projects using a 6-cent gas tax increase and 10-cent diesel tax increase, all phased in over three years, along with an 8-cent increase on alternative fuels. Motor vehicle registrations also would be increased $5 to $10 depending on the type of vehicle.
To offset those increases, the bill would cut the sales tax on food to 4 percent from 5 percent, in addition to decreasing franchise and excise taxes on businesses and manufacturers and phasing out the Hall income tax on interest and dividends.
Several Republican legislators such as Rep. Jerry Sexton of Bean Station in East Tennessee said they could not support increasing fuel taxes and accused the governor and proponents of the measure of playing games with state funds, especially since the state is staring at a $1 billion surplus and $960 million in extra recurring money for next fiscal year.
“Just praise Jesus, we’ve got more money than we need,” Sexton said, in support of a plan to build up the transportation fund with car sales tax revenue.
Later, Sexton said he couldn’t figure out why the state is cutting taxes in the general fund and raising taxes for the transportation fund.
“Money’s money, no matter what pocket you put it in,” Sexton said.
But Stephen Smith, the governor’s chief policy adviser, told lawmakers the state is able to cut taxes going to the general fund because of its strong financial situation while increasing fuel taxes to boost spending in the transportation fund.
The plan calls for starting or finishing 962 road and bridge projects statewide within 14 to 15 years.
“It’s two separate funds,” Smith said, explaining revenue for infrastructure will come from road users, including tourists and those who drive through Tennessee.
The bill moves next to the House State & Local Government Committee for consideration. Earlier Tuesday, the Senate State & Local Government Committee passed the Norris bill.
Both votes came the day after the conservative group, Americans for Tax Reform, sent a letter to state legislators telling them the Norris amendment enabled the IMPROVE Act to pass muster as a tax reduction and wouldn’t violate any taxpayer protection pledges.
Lt. Gov. Randy McNally pointed out in a Facebook posting that opponents of the IMPROVE Act were correct initially when they argued the state could not “in good conscience” ask for a tax increase when it is running a budget surplus. Things have changed since then, he said.
“Those who still refer to this plan as a tax increase are either being disingenuous or are misinformed,” McNally’s post states. “The amended plan now under consideration is not a tax increase in any shape, form or fashion. It is not even ‘revenue-neutral.’ It is a clear and undisputed tax cut.”
Smith told House members Tuesday the bill, as amended, would save a family of four $2 to $4 each month.
Sam Stockard is a Nashville-based reporter covering the Legislature for The Memphis Daily News. He can be reached at email@example.com.