AS GAS PRICES GO DOWN – TN WANTS TO RAISE GAS TAX (FIRST TIME SINCE 1989)

gas-pump-handleWhile we all have enjoyed dropping gas prices, it may not last long.  Not because the gas companies will raise the price back up (although that will probably happen in time) – Now the State is thinking maybe they could raise the gas tax to get more money for road improvements across the state.  Road departments depend entirely on revenue from the gasoline tax to operate on.  The rationale is that Tennessee’s gas tax hasn’t gone up since 1989 and road departments are starving for more revenue.  Even though the road revenue has increased very little  in more than 25 years, costs for materials, equipment and salaries have more than tripled in some cases.

The intrigue at Capitol Hill comes as more than 40 Middle Tennessee mayors have called on the governor to find additional revenue for transportation projects that have piled up across the state.

And in a flip from recent years, the politically powerful Tennessee Farm Bureau no longer includes opposition to an increase in Tennessee’s gas tax among its legislative priorities.

An updated policy statement approved at its annual meeting in Franklin this month now says that “good highways, roads, and bridges are of vital interest to agriculture and to rural people.”

Tennessee imposes 21.4 cents in taxes per gallon of fuel. The federal gas tax, which hasn’t changed since 1993, is 18.4 cents per gallon, meaning drivers in Tennessee pay a total of 39.8 cents on each gallon of gas purchased.

The state portion provides an estimated $658 million a year and, according to Tennessee Department of Transportation Commissioner John Schroer, costs the average driver less than $300 a year. He said Tennessee has the 13th-lowest gas tax in the country.

During TDOT’s budget hearing this month, Schroer said Tennessee is becoming a “maintenance-only state” when it comes to transportation projects. His department earlier this year delayed 12 construction projects and 21 right-of-way acquisitions totaling $400 million because of uncertainty over federal funds.

• Tennessee’s gas tax is 13th lowest in the nation, according to the Tennessee Department of Transportation.

• It’s in line with neighboring states, but Alabama, Mississippi, Missouri and Virginia all have lower state gas taxes than Tennessee as of October, according to the American Petroleum Institute.

• Kentucky drivers pay almost 32 cents per gallon in state taxes. North Carolina charges 36.75 cents per gallon in taxes and fees, while Arkansas and Georgia also charge rates higher than Tennessee’s.

• The national average for state gas taxes and other fees is 30.88 cents per gallon, according to API.

History of Tennessee gas tax

1923: 2 cents per gallon

1981: 9 cents per gallon

1986: 16 cents

1989 (current rate): 20 cents, not including the 1.4-cent-per-gallon special petroleum fee.

How much you pay in gas taxes in Tennessee depends on how far you drive and the fuel efficiency of your vehicle. If you drive an all-electric Nissan Leaf, for example, you would not pay any gas taxes.

Here’s a look at how much you would pay in state and federal gas taxes if you drove some of the most popular vehicles in the nation. The calculations are based on driving 15,000 miles a year only in Tennessee using the combined city/highway EPA fuel economy rating.

Ford F-150 pickup 2WD: $398

Honda Accord: $206

Toyota Camry: $213

Nissan Altima: $193

Chevrolet Tahoe 4WD: $351

Toyota Prius: $119

(Tennessean)