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Academics question transportation funding options

Tennessee   ·   Public Transportation   ·   Nashville Post

"In the past three years, most states have increased or introduced new taxes in order to boost transportation funding," begins a new study from researchers at the University of Tennessee's Baker Center for Public Policy.

Not so in Tennessee, where the last gas tax increase was in 1989, and the tax rate remains the 11th lowest in the nation.

A perfect storm of falling gas consumption rates, rising construction costs, population growth could lead to shortfalls as the state attempts to maintain its roads and other transportation systems. So, the UT researchers looked to other states to provide legislators with options as they consider gas tax updates in their 2017 session.

"States should choose their own policy path based on their unique circumstances," Matt Murray (pictured), director of the Baker Center and one of the authors of the report, said in a release. "Policymakers and the public need to evaluate potential funding solutions carefully since each will offer specific strengths and weaknesses."

The Tennessee Comptroller of the Treasurer considered many of the same financial challenges facing the state's transportation system in a report published in January 2015.

 Like their academic counterparts, state researchers found that "Tennessee's fuel taxes are not expected to be sufficient to maintain existing infrastructure and meet long-term transportation demands."

 Gov. Bill Haslam has already said changes to the gas tax will be considered during the 2017 legislative session.

 Speaking at the Tennessee Farm Bureau Federation State Convention in Franklin Tuesday morning, Haslam again pitched the idea for a gas tax increase to boost transportation spending -- and to do it now, while there's a budget surplus, instead of waiting until the funds are desperately needed.

 Haslam said that if a gas tax doesn't pass this session, it won't pass for at least another four years, as the legislature is unlikely to pass a tax increase in an election year and a new governor wouldn't have the mandate to get a tax increase through until settling into office.

 He also stressed that increased transportation funds will benefit the entire state.

 "We talk a lot about transportation issues in Nashville -- you might think of that as a public transit issues, or what are we going to do about 440, and in our cities it looks like that. But in our rural areas, literally, if you depend on getting your product to market, and you have a county bridge or a state bridge that needs to be repaired, it's a life or death matter for your business," Haslam said.

 Municipal and county governments in Middle Tennessee are simultaneously pondering how to pay for transit.

 A study commissioned by the Nashville Area Chamber of Commerce and released last month identified seven potential funding sources for a 10-county regional transit system, which could cost as much as $6 billion over 25 years.

 The UT report offered no recommendations -- "there is no single-best means of enhancing the capacity to fund essential transportation infrastructure," the authors wrote -- but did describe some of the possible drawbacks of transportation funding schemes floated in other states.

 Charging drivers based on vehicle miles traveled can be a more precise way to generate transportation dollars, the authors said, particularly as fuel efficiency continues to increase. Three states are currently experimenting with vehicle miles traveled systems, but replicating that in Tennessee "would entail substantial new costs as well as possible privacy concerns," the authors found.

 The privacy concerns stem from the GPS tracking required for the most precise vehicle miles traveled systems, and the report suggests increasing current tax rates could grow revenue without adding any new administrative costs.

 Plus, the current gas tax is familiar.

 "The current system of road user finance is relatively well known," according to the report. "This transparency is an important strength of the current system. Complicated mechanisms intended to jointly address revenue need and other policy objectives can weaken support for the system."

 And in fact, voters in both Michigan and Massachusetts have recently rejected variable taxing systems, including an attempt in Massachusetts to tie gas tax rates to fluctuations in the Consumer Price Index.

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