Evaluating Options for Funding Tennessee's Infrastructure Needs

Authors: Donald J. Bruce

Publication Date: February 1, 2017

A healthy infrastructure network is critical to Tennessee’s economy. Unfortunately, the funding mechanism behind the state’s infrastructure is falling short. At its core is a system of per-gallon taxes on motor fuel and diesel fuel. While improvements in fuel efficiency create an important environmental benefit in the form of cleaner air, the slower growth in the demand for gasoline means fewer dollars for highway maintenance. The resulting backlog will eventually place significant demands on the state’s overall revenue portfolio.