McMinnville officials are voicing concerns for the state’s proposed plan to juggle taxes and how those changes will affect local revenues.
Mayor Jimmy Haley says a meeting between state and local officials is in the works.
“The Commissioner of Transportation Mr. (John) Schroer, at some point within the next month, wants to have a joint session of all elected bodies within Warren County in one meeting for him to explain the implications of the gasoline tax and how it’s going to affect local government’s revenues,” said Haley.
At the heart of the situation is Gov. Bill Haslam’s gas tax plan that is expected to include a 7-cent per gallon increase on gasoline to fund transportation initiatives and offsetting the increases with other tax cuts.
The plan proposes tax cuts of $270 million annually, while increasing revenue through taxes and fees by $278 million this year. The tax procedure that allows government to receive the same amount of money despite changes in tax law is defined as “revenue neutral.”
Haley says he’s been meeting with state representatives to determine what the local impact will be if the changes are made.
“I did go and meet with the governor and deputy governor and commissioners last Wednesday in Nashville about the gasoline tax and its implications,” said Haley. “I’m not sure if this gas tax is going to pass. It’s not very popular right now with the budget surplus. The governor says the legislature is going to reduce business taxes by several hundred million dollars, the Halls tax is being gradually lowered, and they are reducing sales tax on food by half a percent.”
Haley says only time will tell if the changes would be revenue neutral for local governments.
“Some of our revenues could be affected by it,” said Haley. “The amount of money that could come back to Public Works to the city for transportation projects will make up more than the difference if that all pans out. I’m not sure it’s all going to pan out or not.”
Currently, the state’s budget surplus is in excess of $1 billion. Haley says state officials are at odds on how to spend the surplus.
A date and time for the meeting between local governments and Commissioner Schroer has yet to be set.