Tenn. gov: Gas tax overhaul needed, but not now

Associated Press
In this Nov. 4, 2011, photo, officials with the Tennessee Department of Transportation appear in budget hearings at the state Capitol in Nashville, Tenn. From left are chief administrator Joe Galbato, Commissioner John Schroer and chief engineer Paul Degges. (AP Photo/Erik Schelzig)
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In this Nov. 4, 2011, photo, officials with the Tennessee Department of Transportation appear in budget …

NASHVILLE, Tenn. (AP) — Gov. Bill Haslam warned that declining gas tax revenues will be a major problem for Tennessee's infrastructure over the next decade, but said on Monday that he doesn't plan to introduce any proposals to overhaul the system in the upcoming legislative session.

Transportation Commissioner John Schroer said in budget hearings last week that he has met with the heads of the House and Senate transportation committees about the effect of improving fuel economy and the advent of electric vehicles on Tennessee's gas tax system.

"We're going to have to figure out before it's too late how we're going to systematically fund transportation in the future," Schroer said at the hearing. "We can't always rely on the gas tax to be the way that we fund transportation."

Schroer said part of the discussion with lawmakers centered on what to do about electric vehicles, like the Nissan Leaf.

Franklin-based Nissan North America Inc. is building a lithium-ion battery plant in Smyrna for Leaf, and the car now manufactured in Japan is scheduled to begin being built at the Tennessee plant next year. Nissan also plans to begin building motors for the vehicle at its engine plant in Decherd starting in 2013.

The state currently collects 21.4-cent tax on each gallon of gas, regardless of the price at the pump. Because the Leaf and other electric vehicles don't use gasoline, they don't pay their share to use Tennessee roads.

"There's a great concern over that and we don't know what we're going to do," Schroer said.

Haslam at the hearing called the road funding mechanism the "biggest risk" to the state's transportation network.

"As we use less — which is good — there's less funding to maintain this $15 billion infrastructure," he said.

It's unclear what alternatives exist the governor would entertain. During the last year's governor's race, Haslam spoke out against toll roads or lanes, and said he wouldn't raise the tax during tough economic times.

"We're not close to proposing a change on that," Haslam told reporters on Monday. "But all of us can look and say logically, there's no way 10 years from now we're doing it the same way we are now."

Haslam said changes to the gas tax won't be on his agenda this year, and probably not the next year, either.

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