TACIR: Tennessee faces $400M budget shortfall in highway maintenance

Tennessee has a $400 million gap in the cost of operating, maintaining, and improving its highways, according to a a recently released report by the Tennessee Advisory Commission on Intergovernmental Relations (TACIR). The study conducted by TACIR found that either increasing taxes or borrowing money will be necessary if the state is to make up for a $400 million funding gap. While the state needs $3.6 billion for highways, it only generates $3.2 billion with TACIR projecting the state will need to spend $7.8 billion per year on roads by 2055. Suggestions for lessening the gap include increasing existing fuel taxes, implementing new taxes, or remove the state’s restriction on borrowing money for road projects, known as a “pay as you go” model. Another recent state budget report by the nonpartisan Sycamore Institute also found current state revenues are not keeping up with inflation, creating a “structural deficit.”