President Trump and Tennessee Governor, Bill Haslam, are in agreement that infrastructure needs to be repaired and expanded. But, they aren’t in agreement on how to finance it. Tennessee’s government doesn’t take on debt to improve, renovate, or build roadways. That means they don’t issue bonds or enter into any agreements that require incurring debt. President Trump is for public/private partnerships to repair or build new infrastructure.
President Trump’s plan would provide financial incentives to private companies to build the infrastructure and maintain it for a pre-determined amount of time. They would make their profit by charging tolls for people to use the roadways or receiving payments from the state. This plan isn’t an acceptable solution for Governor Haslam. He said, “We would love it [a Trump proposal] if it was something that followed traditional revenue where states get ‘x’ percent of that revenue, and we could count on that for our long-term needs.”
Currently, Tennessee has about $10.5 billion dollars worth of backlogged highway projects. Their current budget has a $1.87 billion transportation budget. The state’s share of federal fuel taxes provides $1 billion of that budget. The federal fuel tax rate hasn’t changed for years.
President Trump requested states to send him a list of projects that were ready to begin if the state had the money. Tennessee sent a list of 7 projects with a combined budget of $1.1 billion. Those seven projects are a minuscule part of the 1000 backlogged jobs they have throughout the state.
Governor Haslam has proposed tax and fee increases as the way to raise money for the projects. The state hasn’t raised the gas tax since 1989; he wants to raise it 7 cents to 28.4 cents a gallon. He wants diesel fuel to rise 12 cents to 30.4 cents. Additionally, the state has planned a $5 to $10 increase in car registration fees, a $100 fee for electric vehicles, a 3% extra charge on rental vehicles, and increasing natural gas fuel taxes by 15 cents per gallon.