Tennessee governor unveils transportation funding plan

December 7, 2022

Keith Goble


Tennessee Gov. Bill Lee has unveiled his proposal to tackle transportation funding needs throughout the state. Raising the state’s fuel tax rates is off the table.

The state estimates it needs $26 billion to address traffic congestion by 2040. The amount includes nearly $14 billion in the four major urban areas of Chattanooga, Knoxville, Memphis and Nashville.

The Republican governor reelected last month said his “Build With Us” plan will ensure the state can meet current and future transportation challenges in rural and urban locations.

Lee’s administration says state growth and truck traffic is far outpacing roadway capacity investments.

“When it comes to transportation and mobility in Tennessee, we are at a critical juncture,” a Tennessee Department of Transportation announcement reads.

The agency adds that while growth in the state yields economic opportunity, it also presents challenges in the ability to move people, goods, and services more seamlessly across the state.

“Our position as an artery of commerce necessitates our focus to ensure freight, visitors, and citizens traveling our state get where they need to be on time.”

Fuel tax increase a nonstarter

Lee said he is opposed to issuing bonds or raising the fuel tax to raise revenue.

Fuel taxes were last raised in 2017. At that time, the 20-cent gas rate increased 6 cents to 26 cents. The 17-cent diesel tax increased 10 cents to 27 cents.

“As Tennessee continues to experience unprecedented growth, it’s critical we invest in roads and bridges to fully harness our state’s success,” Lee said in a news release. “The Build With Us plan will provide quality infrastructure in both rural and urban communities and blunt congestion without raising the gas tax or going into debt.”

Public-private partnerships

The governor said he will pursue public-private partnerships to design, build, finance, operate, and maintain express toll lanes, or “choice lanes.”

His administration says choice lanes “give car and truck drivers the option to pay a user fee to access an additional lane with more reliable trip times, while keeping the option to use traditional highway lanes.”

Transportation commissioner Butch Eley has stated that any express toll lanes would be constructed and no existing lanes in the state would be converted to express lanes.

Electric vehicles

TDOT adds that the revenue stream for transportation relies heavily on fuel taxes, which is described as being eroded through factors that include increased fuel economy and the emergence of hybrid and electric vehicles.

Additionally, because the state’s fuel tax rates are not indexed, TDOT’s purchasing power is further diminished by rising construction costs and inflation.

One solution recommended by the road agency is to raise fees for owners of electric vehicles.

Affected vehicle owners now pay $100 yearly.

Eley has recommended to the governor that the state increase the annual rate to $300.

Lee said he will propose legislation to address transportation funding needs in the regular session that convenes Jan. 10. LL

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