One of the major challenges that the state of Tennessee will face in the future will be maintaining the state highway fund at a level needed to continue to repair and replace roads and bridges but to also construct new highways. Anita Wadhwani with the Tennessee Lookout Report recently published an excellent article. A link to that article is: https://tennesseelookout.com/briefs/advisory-group-projects-looming-deficits-in-tennessee-road-and-highway-project-funding/.
As noted in her article, there was a hearing where representatives of the Tennessee Advisory Commission on Intergovernmental Relations (“TACIR”) provided an update which should get the attention of not only the legislature but also the trucking industry. TACIR testimony indicated by 2040 10% of all vehicles on Tennessee’s roadways are projected to be electric. It is also expected that the average national vehicle fuel efficiency will increase from 23-miles-per-gallon to 30-miles-per-gallon during the same timeframe. As a result, based on loss of fuel tax revenue, fuel efficiency and inflation, it is projected that Tennessee will see a $399 million reduction in its gas tax spending power.
The challenge faced by the State to maintain the highway fund at a level to pay for repairs and construction of new projects will be challenging. Not only will there be a decrease of revenue but the fact that the state fuel tax is not indexed for inflation will certainly cause issues that the legislature will want to review in the near future. As noted in the article, Tennessee has 96,000 miles of public roads and 20,000 bridges but federal government funding is designated only for about 1/5 of all of the state’s roads and highways.
We expect this issue to remain on the radar of the legislature in the near future with all options being on the table. Recent options that were recommended include raising registration fees for electric vehicles, implementing indexing on the state fuel tax, and even the possibility of reviewing some type of fee based on mileage.
We are heading into the final days of the 2022 election season. Thanks to your support, TruckPAC has been very active in helping legislators who are supportive of the industry. TTA along with Adams and Reese hosted a dinner in Nashville on October 19, 2022 in support of House Speaker Cameron Sexton and his leadership PAC. As always, thank you for your support!