Image Credit: Hamilton County Pachyderm Club / Facebook
The Tennessee Conservative [By Adelia Kirchner] –
On Monday, Rep. Dan Howell (R-Cleveland-District 22) spoke to members of the Pachyderm Club about what road funding has looked like for Tennessee in the past and what the current fiscal outlook is regarding transportation costs for the state.
Way back in 1923, there were only 244 miles of paved roads across the entire state and former Gov. Austin Peay (D-TN) headed up a legislative effort that established a $0.02 gas tax that cost $0.14 per gallon, a 14% tax rate.
Since then, the funding initiative has acted as the primary source of transportation revenue.
However, according to Rep. Howell, Tennessee can no longer solely rely on the gas tax to fund transportation costs.
The gas tax currently sits at $0.26 per gallon of gasoline and $0.27 per gallon of diesel.
The Chattanoogan reports that the current gas tax rate has not kept up with inflation over the years as the original $0.02 gas tax of 1923 would be equivalent to $0.37 cents today.
Gas tax revenue has also declined $4 million annually since FY22-23.
May 2025 numbers display a 5.3% year-over-year decrease.
Rep. Howell said that part of this decline can be attributed to Federal Corporate Average Fuel Economy (CAFE) standards encouraging automakers to produce for fuel-efficiency in order to reduce gas consumption across the board.
In Tennessee, gas consumption has dropped by 183,000 gallons/day since 2016.
Meanwhile, demand on the state’s transportation infrastructure has increased dramatically due to a large influx of population growth in recent years.
The Tennessee Department of Transportation (TDOT) is funded by gas tax revenue and the department currently has roughly $1.9 billion to put towards maintenance of 100,000 miles of roads and over 20,000 bridges, after covering the cost of employees, public transit, short-line railroads and operations.
This information and a $38 billion deferred maintenance backlog for transportation infrastructure is what Rep. Howell says prompted Gov. Bill Lee’s Transportation Modernization Act of 2023.
In recent years, the state has invested more than $5 billion in one-time funding into TDOT for transportation infrastructure.
However, Rep. Howell says these non-recurring funds make it virtually impossible to properly plan ahead on future projects and that the current discussion regarding transportation infrastructure reflects broader challenges facing states across the country.
As vehicle technology continues to evolve and travel patterns shift in the U.S., Rep. Howell says that combining public-private partnerships, strategic use of surplus funds and traditional funding sources, is one way to address the issue as a state while maintaining fiscal responsibility.
About the Author: Adelia Kirchner is a Tennessee resident and reporter for the Tennessee Conservative. Currently the host of Subtle Rampage Podcast, she has also worked for the South Dakota State Legislature and interned for Senator Bill Hagerty’s Office in Nashville, Tennessee. You can reach Adelia at adelia@tennesseeconservativenews.com.
