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Tennessee debating potential gas tax hike

Tennessee debating potential gas tax hike
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Tennessee is debating a possible increase in the amount of money drivers in the state will have to pay at the pump to help fund transportation projects as federal road funding dries up, The Associated Press reports

Tennessee Gov. Bill Haslam (R) is traveling the state on a 15-city tour to discuss a shortfall in its transportation funding. He is expected to present potential solutions to the transportation funding problem at the end of the trip, which could include increasing the state's 21.4 cents-per-gallon gas tax. 

The proposal is already being met with resistance by Republicans in the Tennessee state legislature, according to the report. 

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“This is a tax on the middle class and working poor,” the AP reported Tennessee House Speaker Beth Harwell (R-Nashville) said. 

The leader of the Tennessee state Senate was more open to the possibility of increasing gas taxes in the state to help pay for roads. 

"If there’s a basic function of government, it is to build infrastructure,” Tennessee Senate Speaker Ron Ramsey (R-Blountville) said, according to the AP. “I hope we can find a way to address it this year.” 

Any increase in the Tennessee fuel levy will be collected on top of an 18.4 cents-per-gallon federal gas tax that is charged to all drivers in the nation to fill the federal government’s transportation funding coffers.

Tennessee drivers are currently charged 39.8 cents per gallon on gas purchases in a combination of federal and state taxes, according to the American Petroleum Institute. 

Tennessee is the latest state to consider increasing its own gas tax in recent years as the future of federal transportation funding looks uncertain. Six other states implemented such increases on July 1

Lawmakers in Congress last month approved a three-month extension of federal transportation funding that will extend the nation's road and transit spending until Oct. 29. They debated the possibility of passing a long-term highway bill before the federal transportation funding deadline and were only able to agree on a temporary patch.  

National transportation advocates have pointed to the willingness of states such as Tennessee to raise their own gas taxes as evidence that a national increase would be politically palatable this year. 

Conservative groups in Washington have made clear that they would consider any such move a tax hike, however, and Republican lawmakers have explicitly ruled it out.

The national gas tax has been the traditional source of transportation funding since its inception in the 1930s. But the tax has not been increased since 1993, and increased vehicle fuel efficiency has sapped its purchasing power. 

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in approximately $34 billion annually at its current rate. 

Lawmakers have turned to other areas of the federal budget in recent years to close the $16 billion-per-year gap, but transportation advocates have said the resulting temporary funding measures are preventing states from completing large construction projects.