Mar 21, 5:52 PM EDT

Haslam proposal to boost road funding advances in House

NASHVILLE, Tenn. (AP) -- Republican Gov. Bill Haslam's proposal to boost transportation funding through Tennessee's first gas tax hike since 1989 survived a key House committee vote on Tuesday.

The House Transportation Committee voted 11-7 for the bill that would also cut sales taxes on groceries, corporate taxes on manufacturers and taxes on earnings from stocks and bonds.

Haslam stresses that the bill would save Tennesseans more at the grocery store than they will pay at the pump, but several fellow Republicans in the Legislature are skeptical about his approach amid a healthy budget surplus.

"Praise Jesus, we've got more money than what we need, but we have to go raise taxes to fix our roads," said Republican Rep. Jerry Sexton of Bean Station, who voted against the measure. "That's sad, isn't it? I just hate that so bad."

Sexton said it's a "farce" to argue that tax cuts in Haslam's package are larger than the fuel tax increases.

"When you go to the pump, Republicans did it to you," he said. "Don't blame the Democrats."

Haslam's proposal got a boost earlier this week when conservative anti-tax advocate Grover Norquist wrote a letter to lawmakers agreeing that the bill represents a "net tax cut" for Tennesseans and that a vote in favor of the bill wouldn't violate lawmakers' pledges to not raise taxes.

The House committee defeated a rival proposal to do away with the fuel tax hike and redirect tax money collected from vehicle sales to the highway fund.

Haslam's transportation plan is aimed at tackling a $10 billion backlog in road and bridge projects. Supporters call the gas and diesel taxes a user fee, noting that up to 50 percent of those taxes are paid for by trucking companies or visitors from other states.

Critics also took issue with part of the bill seeking to provide property tax relief for the elderly, veterans and the disabled. Republican Rep. Courtney Rogers of Goodlettsville suggested that the provision was added to pressure lawmakers into voting for the gas tax.

"On this bill, if we refuse to vote to support our veterans on this ... then they will continue to disregard our veterans," she said.

Earlier Tuesday, the Senate State and Local Government Committee unanimously advanced the transportation fund to its last committee before a full floor vote. The committee approved it after voting to allow the state's 13 largest counties to hold referendums on raising taxes to fund transit projects.

The House and Senate versions are now in similar forms. Haslam said before the House panel vote that it was important for the two versions to be similar when they reach floor votes.

"If the bill takes two very different forms, one in the Senate and one in the House, I think that's a dead end," Haslam said. "I would like to get it in the best form now and get that passed."

Haslam said delays in taking up the transportation funding bill will cause his administration to put off releasing his final budget proposal that had originally been planned for April 4.

"There's just too many things that impact the budget," he said. "It all depends on what the path from here looks like."

Traditionally the introduction of the governor's budget amendment signals that the legislative session can conclude within two or three weeks.

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