NEWS

Haslam expands transit referendum proposal with new tax options

Joey Garrison, and Joel Ebert
The Tennessean

Gov. Bill Haslam has significantly expanded his proposal for local governments to acquire the power to hold referendums on transit funding by opening up a range of additional tax options that cities could bring before voters.

As part of his IMPROVE Act, Haslam had originally limited his local option proposal to an increase on local sales tax rates for cities and counties to pay for future transit projects.

But in an amendment to his transportation bill filed Tuesday, the governor has quietly proposed allowing local referendums on surcharges to other local taxes to pay for public transit projects and services. The new options are local property tax, business tax, motor vehicle tax, local rental car tax, tourist accommodation tax, residential development tax and a tax that some cities have inside a designated tourist development zone.

The greater taxing authority would be extended to all county governments in Tennessee as well as the state's four biggest cities: Nashville, Memphis, Knoxville and Chattanooga. All surcharges would need to be separate charges on top of the existing taxes.

"After discussions with stakeholders over the past several weeks, this gives local governments more flexibility on how to fund public transit projects, if approved by local voters through referendum," Haslam spokeswoman Jennifer Donnals said in an emailed statement.

Gov. Haslam plan would allow local referendums for transit funding

Two Democrats — Sen. Sara Kyle, D-Memphis, and Rep. John Ray Clemmons, D-Nashville, who sponsored their own transportation bill — claimed a victory at the inclusion of expanded local options.

"One of the chief goals of our plan is to empower local governments and give them more discretion to choose the funding tool or tools that work best for their county or city," Clemmons said in a news release. "Governor Haslam's amended language is a significant win for local governments, and we appreciate the inclusion of this component of our plan in his funding proposal."

Haslam's local transit proposal is tacked onto a larger comprehensive transportation plan that calls for a 7-cent-per-gallon hike on gasoline in Tennessee to pay for roadway, bridge and other infrastructure work and is accompanied by a series of tax cuts. A House subcommittee on Wednesday held off from voting on the governor's plan for another week.

The Middle Tennessee Mayors Caucus, chaired by Williamson County Mayor Rogers Anderson, has made the local transit option a central piece of its pitch in support of Haslam's IMPROVE Act. A handful of area mayors met with Haslam and other lawmakers at Legislative Plaza on Tuesday to voice their position.

"Let the people decide," Anderson said.

Nashville Mayor Megan Barry is hoping to begin funding components of a $6 billion regional transit system. She's circled 2018 as her preferred timeline to hold a referendum in Davidson County on transit funding, but she first needs passage of state enabling legislation.

“You will have a voice in this if this passes,” Barry said in a speech to the Rotary Club of Nashville last month, “because this is about going out to the voters of Davidson County with the ability to have a referendum which would then allow you to weigh in.”

Middle Tennessee's transit plan, adopted last year by the Regional Transportation Authority, involves a wide assortment of transit modes, including light rail, commuter rail and bus rapid transit, both within Davidson County and connecting to outlying counties.

Barry ramps up pitch for transit funding referendum; eyes ballot in '18

Barry, transit advocates have backup bill if governor’s plan fails

Barry is pushing hard for passage of the governor's IMPROVE Act, but just in case, state Sen. Steve Dickerson, R-Nashville, and other Republican lawmakers have filed a separate bill that also would give local governments the ability to hold transit funding referendums. It has presented transit advocates like Barry a plan B in case Haslam's gas tax proposal fails.

Elsewhere, including Knoxville, where a transit system is not on the table, local leaders offered mixed positions on the governor's expanded proposal.

Knox County Mayor Tim Burchett, a Republican, said he wouldn't be bringing a proposal to voters there about raising any kind of tax to pay for transit.

"We don't need any more local taxes," he said. "Local control is a good thing, but don't expect me to go to the taxpayers asking for any tax increases."

Knoxville Mayor Madeline Rogero, a Democrat, said she supports the move, noting growing ridership of the Knoxville KAT system, which includes trolleys and buses.

"We support Governor Haslam’s proposal that would give additional options to local governments in providing public transit services,” Rogero said.

It's unclear how Haslam's expanded local transit option might affect the fate of his overall gas tax proposal. Many state lawmakers of both parties said they are still reviewing the changes.

House Minority Leader Craig Fitzhugh, D-Ripley, said the inclusion of other tax options makes the governor's transportation plan more palatable.

“It certainly makes it more palatable on the big cities and the counties as well," he said.

Reach Joey Garrison at 615-259-8236 and on Twitter @joeygarrison.