Higher Gas Tax Will Hurt Tennessee Families

Mar 1, 2017 by AFP

Tennessee’s government is sitting on a $2 billion surplus, but Gov. Bill Haslam wants to take more money from Tennessee families to fill holes left by bad budgeting. Americans for Prosperity-Tennessee and its supporters will go to the hill and talk with lawmakers about what this tax increase would mean for residents before its vote.

Gov. Haslam is proposing raising the state’s gas tax by 7 cents a gallon on regular fuel and 12 cents a gallon on diesel. Those are increases of 33 percent and 65 percent, respectively, over what we pay today! But in addition to the initial increase, the gas tax will be indexed to inflation every two years, meaning your bill at the pump will only keep going up—even if your income doesn’t.

The gas tax is only one component of Gov. Haslam’s plan to take more out of Tennesseans’ paychecks. All said and done, the budget proposal amounts to $300 million in higher taxes each year.

Even citizens who acknowledge Tennessee’s infrastructure needs repairs aren’t willing to support the gas tax hike. Columbia resident Tricia Stickel recently told public radio she’s against efforts to raise the gas tax because she knows the consequences won’t stop at the gas station. She said they’ll keep trickling, as higher transportation costs are passed onto consumers:

“Consider all the food in your grocery store…This is a double whammy…Every good in that store will be increased, and [consumers]’ll get the tax on that.”

In 2015, federal economists concluded that Tennessee has one of the most regressive tax systems in the country. That means people who can least afford it end up paying a higher proportion of their income in taxes compared to higher earners. A gas tax increase means Tennesseans will pay more for everyday items and have a harder time getting ahead.

So who does support the gas tax increase? That’s right—people and industries who will benefit most from it like construction companies and truckers.

There are other ways to fund the state’s transportation needs. One option is using funds from the $2 billion surplus. Another is Rep. David Hawk’s proposal to divert one-quarter of 1 percent of the state’s sales tax to the transportation budget.

Raising taxes should be lawmakers’ last resort to fund the budget. They should oppose Gov. Haslam’s gas tax increase and pursue alternative, responsible-spending solutions.