(The Center Square) – Revenue for transportation projects is flat and it’s not keeping pace with what Tennessee needs, state Transportation Commissioner Will Reid told a panel of lawmakers.
“Federal, state and local funding have no recurring growth and our fuel taxes have not been indexed to inflation,” Reid told the Tennessee Advisory Commission on Intergovernmental Relations. “Meanwhile the cost of building roads and building infrastructure has tripled since the early 2000s.”
The commission requested a study of transportation funding, which is expected for in September 2026.
Lawmakers grappled with transportation funding for years. Projects promised in 2017’s Improve Act, which raised the state’s fuel tax, have still not been completed. The price tag for the remaining projects is $15 million, Reid said.
The Transportation Modernization Act, passed in 2023, allocated $3 billion to transportation projects. Ninety-percent of projects funded by the act will be completed by 2029, according to Reid.
The General Assembly approved Gov. Bill Lee’s request of $1 billion in non-recurring money and $80 million in recurring funding during the 2025 session. The $80 million will come from the state’s tire tax.
The influx of money is not enough to keep the state’s transportation needs on track. In 2029, spending levels will return to 2018 levels, Reid said.
“Without new sustainable revenue, we run the risk of sliding backwards while the state continues to grow,” Reid said.
The first need is to maintain the current roads, he said. In addition to maintenance, rural interstates require widening and urban congestion needs to be alleviated.
“We have over 650 miles of rural interstates that are still in the original two-lane configuration, while we have more freight moving through this state than almost any state in the country,” Reid said.
The price tag for widening the interstates is about $20 billion, according to Reid.
County transportation departments are facing the same issues, according to Brett Howell, executive director of the Tennessee County Highway Officials Association. A major concern is the approximately 7,900 bridges that are currently rated as fair or in poor condition, he said.
“Local governments continue to look for ways to mitigate some of the losses being experienced in traditional fuel tax collections, which are stagnating as the commissioner has already stated,” Howell said. “And that’s despite the state’s population growth.”
One solution could be indexing the state’s fuel tax for inflation, lawmakers were told. If that had been done in 2020, an additional $240 million in revenue would have been available to the transportation department and local governments, according to a report presented to the commission by Kent Starwalt, vice president of the Tennessee Road Builders Association.
The General Assembly will address transportation and other funding issues in January, amid what is being called a tight budget year.
