Gov. Haslam proposes 7-cent Tennessee gas tax hike

NASHVILLE, Tenn. (AP) — Republican Gov. Bill Haslam is proposing to raise Tennessee’s tax on each gallon of gasoline by 7 cents while cutting the state’s sales tax on groceries and income from earnings on stocks and bonds.

Haslam says average motorists would pay an extra $4 more per month as part of his plan to generate $278 million annually in new money to pay for road projects around the state.

The governor says he would balance the gas tax increase with proposed cuts of $55 million in the sales tax on groceries, $113 million in corporate taxes for manufacturing companies and $102 million in the Hall tax on investment income.

Haslam also wants to tie the gas tax to inflation and let cities seek a sales tax surcharge to pay for transit projects.