Gov. Bill Haslam's legislation to increase the state's gas tax cleared another legislative hurdle on Wednesday, after a House committee approved yet another altered version of the bill.
The House Finance, Ways and Means Subcommittee stripped out a portion of the bill that would provide property tax relief for eligible disabled veterans and the elderly, which critics said was added by the Senate to drum up support for the controversial plan that seeks to hike the gas tax by 6 cents over a three-year period.
The governor has proposed the plan — which reduces taxes in other areas, such as the sales tax on groceries — to help fund a $10 billion backlog in road projects.
The proposal is estimated to generate about $250 million for the state, $35 million for cities and $70 million for counties.
The House finance subcommittee's decision to remove the tax relief for veterans and the elderly from the governor's plan, known as the IMPROVE Act, comes one day after a separate legislative panel advanced a bill specifically related to property tax relief.
On Tuesday, the House Local Government Subcommittee approved a bill, sponsored by Rep. John Forgety, R-Athens, which would provide property tax relief for veterans based on the value of the first $135,100 of their home. The amended version of the bill would reflect what the Senate added to the IMPROVE Act.
The latest amended version of the gas tax plan also dubs the plan the "2017 Tax Cut Act," said Rep. Barry Doss, R-Leoma, who introduced the measure.
While the subcommittee considered the measure, Doss fielded a variety of questions from lawmakers, including from Rep. David Hawk, R-Greeneville.
Hawk introduced a transportation funding alternative earlier in the session, which Haslam criticized because it would remove money from the state's general fund. After several questions, Hawk eventually got Doss to concede that the tax cuts included in the IMPROVE Act, which include cuts to the state's franchise and excise tax and groceries, would also reduce the state's general fund.
Doss pointed out that Hawk's alternative plan was philosophically different than the governor's proposal, which he repeatedly said relied on a "user fee" in the form of the gas tax.
After more than an hour of discussion, the finance subcommittee approved the newly amended version of the gas tax plan with a unanimous voice vote, sending the measure to the chamber's full finance panel.
While the House finance subcommittee's move is a clear indication of the disagreement between the upper and lower chamber on how to proceed in terms of a property tax relief program that had previously been deemed unsustainable by the Haslam administration, the majority of the governor's plan remains in tact.