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House Transportation committee warns TDOT budget may be unsustainable, explores new revenue sources
Summary
At the Feb. 4 organizational meeting, members of the Tennessee House Transportation Committee discussed the department's funding shortfall, noting the state gas tax has not kept pace with inflation and exploring options including recurring general fund transfers and new legislation to direct other revenues to highways.
The Tennessee House Transportation Committee opened its Feb. 4, 2025, meeting with an extended discussion about long-term funding for the Tennessee Department of Transportation, with members and staff identifying the search for recurring revenue as the committee’s top priority.
The committee chair told members that finding "additional revenue streams for TDOT" is essential, warning that without new funds the department could be limited to maintenance-only work within five to ten years. The chair noted Tennessee’s gas tax has not kept pace with inflation: "We first had a gas tax back in 1923. ... That 2¢, inflation wise, is worth 36¢, but our gas tax is only 27¢," the chair said.
The chair and other members discussed several possible approaches. Representative David Hawk said lawmakers have previously moved one-time general fund dollars into transportation through a "modernization" package and the Improve Act, and suggested creating a recurring general-fund transfer or similar mechanism to sustain ongoing projects. Representative Townes noted the Improve Act had provided substantial money but observed the need to identify sources that could recur over time.
Representative Behn told the committee she intends to file legislation called the "Pot for Potholes Act," saying it would legalize marijuana and direct "80% of that revenue" to the general highway fund. The comment drew no committee vote and was presented as a member’s legislative intent rather than a committee endorsement.
Members emphasized that debate over new revenue sources will likely be robust. The chair said he welcomes discussion and different proposals, and that subcommittees may see detailed proposals first. No formal motions or votes on revenue measures occurred at the meeting.
Committee staff and outside advisers present included Joel Hayes, transportation attorney; Jeremy Maxwell, research analyst; and Brett Howden, executive director of the Tennessee County Highway Officials Society, who chair members were encouraged to consult on county highway matters.
The committee did not adopt any new revenue measure at this meeting. Members signaled intent to continue studying recurring funding options, including revisiting use of general fund transfers and considering legislative proposals that would redirect other revenues to transportation.
