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Draft transportation report outlines $1B+ recurring gap and a menu of revenue options and debt scenarios
Summary
TASER staff presented a draft transportation funding report that estimates a nearly $1 billion recurring gap in FY2028 and models combinations of revenue options, including indexed fuel and registration fees, weight‑based mileage for heavy vehicles, rental/ride‑share/delivery fees, and strategic borrowing and P3s to accelerate projects.
Senior Research Manager Bob Morio presented the commission’s draft report on funding Tennessee’s long‑term transportation infrastructure needs on June 22, laying out a projected recurring funding shortfall and multiple policy alternatives for closing it.
Key findings: The report estimates recurring state resources will total about $2.6 billion in fiscal 2028 while recurring needs to maintain and improve the network are projected at roughly $3.6 billion — leaving nearly a $1 billion gap. Long‑term projections show costs for maintaining pavement, bridges and operations could grow to $3.5 billion by 2055. The report also cites an estimated $24 billion in additional capacity projects in metropolitan areas and widening rural interstates as costing nearly $20 billion.
Revenue alternatives examined: staff assessed indexing or increasing fuel taxes and registration fees, weight‑based registration for larger passenger vehicles, vehicle‑miles‑travelled or weight‑based mileage fees for heavy commercial vehicles, rental‑car surcharges, rideshare per‑trip fees, retail‑delivery fees, and targeted user fees. For example, indexing fuel taxes to inflation could raise an estimated $191 million in FY2028; a 3¢ per‑mile tax on tractor‑trailers could generate roughly $190 million annually; and a 50¢ per‑trip rideshare fee could yield an estimated $45 million in FY2028 (rising over time if indexed and usage grows).
Financing options and scenarios: staff modeled three illustrative scenarios — one combining revenue increases/new fees with limited general‑fund transfers (adds $14.1B through FY2040 versus baseline), a second relying more on general‑fund transfers (adds $15.1B through FY2040) and a third that adds $10B in strategic borrowing to the second scenario to accelerate delivery of priority projects. Staff cautioned that debt service reduces available discretionary revenue over time but could save money by avoiding inflationary cost escalation and deliver benefits sooner.
Member concerns and next steps: commissioners urged deeper analysis of project delivery timelines, the drivers of construction‑cost inflation, and the feasibility of public‑private partnerships (P3s). Morio said staff will incorporate additional analysis (including work contracted with the University of Tennessee on congestion and economic effects) for the final report and will examine project‑timing and cost‑inflation issues further.
Why it matters: The draft presents policy options with quantified revenue estimates and tradeoffs to inform the General Assembly and TDOT as they consider long‑term funding strategies.
What’s next: Staff will refine scenarios, add analysis on delivery timing and inflation, and integrate university research before publishing a final report ahead of the statutory due date.
