NASHVILLE, Tenn. (AP) — Tennessee Gov. Bill Lee on Monday proposed an injection of more than $1 billion into road projects to help address the state’s $30 billion projects backlog, which will again need more than what gas taxes and other fees can provide.
The Republican governor’s budget proposal includes nearly $1 billion in one-time, general state tax money and a plan to shift $80 million annually from the sales tax on tires. It comes two years after Lee and Republican lawmakers approved a similar $3 billion shift of general tax money to roads funding, which is traditionally covered by gas taxes.
The money for roads is one of the big-ticket items in Lee’s $59.5 billion budget proposal for the year that begins in July. Tennessee’s budget has become tighter because tax revenues have slowed compared with the COVID-19 pandemic boom years.
“Safe, reliable roads are a primary responsibility of the state, yet there are limited funds to fulfill an unlimited need,” Lee said in prepared remarks during his annual State of the State speech Monday evening.
Some budget lines were already filled in after a quick special session last month. Lee convinced lawmakers to pass more than $900 million worth of initiatives from different pots of money. They include a huge expansion of vouchers to help students attend private school, coupled with public school teacher bonuses; relief for areas devastated by Hurricane Helene; and changes to help President Donald Trump’s administration with its immigration deportation crackdown plans.
Lee elevated roadwork as a priority in 2023, when his legislation included $3 billion for projects and a hike in electric vehicle and hybrid fees. It also opened the door for allowing express toll lanes on highways through public-private partnerships, which haven’t been implemented yet as officials initially consider it for a stretch of Interstate 24 from Nashville to the southeastern suburbs.
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