Haslam pushes gas tax plan in State of the State address

Gov. Bill Haslam's gas tax proposal, continued investments in education and the extension of a popular tuition-free higher education program were key tenets of his seventh annual State of the State speech Monday.

The governor's $37 billion budget proposal for fiscal year 2017-18 includes $100 million in pay raises for K-12 teachers, $132 million for the state's reserve fund and tax cuts to pay for his controversial gas tax plan.

"Even with all of the progress and unprecedented opportunity, we know that we have to do more," Haslam said while calling for the implementation of a new program that would provide free community college to all adults in Tennessee — an extension of a wildly successful program the governor has already implemented.

The new program, called Tennessee Reconnect, was met with rousing approval from members of the Tennessee General Assembly and those in the House gallery, giving Haslam one of the longest standing ovations of the evening.

The program essentially would expand the Tennessee Promise program, which has sent 33,000 high school graduates to college tuition-free since 2015.

"I am proposing that Tennessee become the first state in the nation to offer all adults access to community college free of tuition and fees," Haslam said. "No caps. No first come, first served. All."

Haslam's speech and budget, which he delivered to the General Assembly shortly after 6 p.m., provided a vision for how he wants to spend the state's $1.1 billion in one-time funds.

Haslam tried to provide a bit of an education to lawmakers in an effort to sell his plans, providing a distinction between nonrecurring — or one-time — money and recurring revenue.

"Nonrecurring revenue would be things like the money Aunt Edna left you in her will," Haslam said, later adding that recurring money is akin to a weekly paycheck.

Haslam used the explanation to underline a larger point: to show that the state should not be using surplus money to pay for the infrastructure needs it faces.

"At its core, transportation and infrastructure are some of the most basic needs provided by state government, and a safe and reliable network is vital to the Tennessee we can be," he said.

Read more: 

Haslam outlines expansion of Tennessee Promise scholarship

Haslam to boost fund for Gatlinburg wildfire recovery

5 things to watch as lawmakers return to Nashville

Gov. Haslam broadband plan offers $45M in grants, incentives

Haslam plan calls for 7-cent gas tax hike, cuts to grocery sales tax

How Gov. Bill Haslam put together his gas tax plan

Haslam spent the majority of his speech stressing the need for his gas tax plan. The plan calls for a 7-cent hike on gasoline and a 12-cent increase on diesel fuel.

Haslam argued that lawmakers should take a serious look at his proposal — which is officially known as the Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy, or IMPROVE, Act — before dismissing it.

Although several House Republicans have been mulling alternative ways to pay for the state's infrastructure needs, the governor's plan includes tax cuts to Tennessee businesses, as well as the state's grocery sales tax — all while helping generate enough revenue to pay for the state's $10 billion backlog of road projects.

In his address, his next to last as governor, Haslam reiterated several points he made during his Jan. 18 rollout of the gas tax plan.

"I know that some of you have said that you're never going to hit the green button for any kind of tax increase," Haslam said, adding that his plan includes targeted cuts.

Beyond the gas tax, Haslam's speech also included a call for passage of his recently debuted broadband initiative, which offers $45 million over three years through grants and tax credits to service providers to encourage them to increase access to broadband in rural areas of the state.

"We live in a world where if you have a strong internet connection you can just work from anywhere," he said. "If we're serious about putting our rural counties on a level playing field, then opening up broadband access is one of the largest steps forward we can take."

Throughout his speech, Haslam hammered the importance of a college education, a familiar theme that has become a trademark of his annual addresses.

But beyond higher education, the governor once again called for pay raises for K-12 teachers. His budget calls for $100 million in raises, slightly less than the $104 million he included in last year's spending plan. The latest pay bump would be the third in a row and is part of a larger effort by Haslam to make Tennessee the fastest-improving state in the nation when it comes to teacher pay.

The governor also announced the Tennessee STRONG Act, an effort to provide tuition-free attendance to those enrolled in the military in Tennessee. "If we can help our soldiers and airmen who protect us at home and abroad, I know you agree we should do it," he said.

To close his speech, Haslam noted the many tragedies that Tennessee has seen since his 2016 address, including a school bus crash in Chattanooga and the Gatlinburg fires.

"In the midst of all that, I have never been more proud to be a Tennessean," he said.

Among Republicans, Haslam's speech was largely met with approval, with House Majority Leader Glen Casada, R-Franklin, praising the governor's plans on education and bolstering the state's reserve fund. As far as the gas tax plan, Casada said the idea would be discussed in depth when it heads to the appropriate legislative committee once a bill is formally introduced.

"The committee system will have an in-depth debate on this gas tax and then the House has some ideas too and so we'll debate it in committee, and what comes out is what I will be behind," Casada said.

Several Democrats, including House Minority Leader Craig Fitzhugh, D-Ripley, and Rep. G.A. Hardaway, D-Memphis, expressed their own concerns about the gas tax plan.

"I have constituents who are poor, on a fixed income, seniors," Hardaway said. "Unless there is some offset for those groups, not to mention the average working man who can’t go out and do any better because there aren’t any better jobs available, I can’t support a gas tax."

Fitzhugh said it was too early to say whether the House Democrats would get fully behind the governor's gas tax plan.

While Haslam received applause at several points in his roughly 30-minute speech, not everyone inside the Capitol was thrilled. The governor's speech was punctured by a group of hundreds of protesters outside the House chamber leading chants about President Donald Trump, Insure Tennessee, Black Lives Matter and women’s health.

Kirk Bado andAdam Tamburin contributed to this report. 

Reach Joel Ebert at jebert@tennessean.com or 615-772-1681 and on Twitter @joelebert29.