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As Gas Prices Fall, Federal & State Taxes May Rise

http://fuelgaugereport.aaa.com/todays-gas-prices/

Gas prices have plummeted to lows not seensince 2009, and in Chattanooga, regular unleaded can be bought for as little as $1.80 per gallon. But the Federal Highway Trust Fund, which finances road construction and other transportation projects, is facing a $100 billion shortfall, according to U.S. Senator Bob Corker.  The federal gas tax rate hasn't increased since 1993, and Congress faces a deadline in May to find a way to keep revenue flowing into the Highway Trust Fund.

Tennessee's Senator Corker, a Republican, and Connecticut's Senator Chris Murphy, a Democrat, have proposed increasing the federal gas tax by 12 cents per gallon.

"We realize today it’s not popular," Sen. Corker says, but adds that he plans to offset the gas increase by decreasing other taxes, so the proposal would end up being revenue neutral.

TENNESSEE TAX RISE?

The state gasoline tax rate in Tennessee could increase as well, Governor Bill Haslam told Nashville Public Radio.

Looking head, Haslam said it’s possible that his office, or the legislature, could propose a gas tax hike. The governor said it’s too soon to say who will move first. Indeed, he was a bit more equivocal in his wording. “There’s no way the state can continue on the path we’re on now. The math just doesn’t work,” Haslam said. “I’m not saying we’re going to ask the legislature to do it, or they’re going to ask us. We’re evaluating the needs, and is this the right time to do that or not … we obviously don’t want to do that until we have to.”

Sen. Corker in a press conference Wednesday said he and Haslam have been communicating about gas tax hikes. 

"I texted Gov. Haslam earlier this morning just to talk with him a little more fully about what the state is considering doing, where they are in the process."

Sen. Corker declined to give specifics of the conversation.

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