Tennessee legislative leaders appear to agree on restoring a bigger property tax break for disabled veterans, which should put the finishing touch on months of work on Gov. Bill Haslam's bill that increases the gas tax to fund road work and cuts other taxes.
Both chambers passed the Republican governor's roads bill Wednesday, with the property tax break unresolved.
The Senate amended the bill to increase property tax relief to disabled veterans back to a maximum of $175,000 in property value. The amount was decreased to $100,000 in 2015 because of financial concerns over growing costs in the program.
House Speaker Beth Harwell, a Nashville Republican, said she's fine with that tax break increase and assumes her members are too, although she said she hasn't polled them on it. The House is expected to agree Monday. The bill then goes to Haslam to be signed into law and includes the state's first gas tax increase since 1989.
Throughout the debate over the plan, a few spats erupted over whether to consider the veteran tax break in a separate bill or keep it in the larger roads package.
Sen. Mark Green, the Clarksville Republican who President Donald Trump recently nominated for Army secretary, at one point called the inclusion of the tax relief a ploy to manipulate veterans to advance an agenda and justify a tax increase.
Senate Majority Leader Mark Norris, a Collierville Republican, said he wasn't confident that a stand-alone bill would have gotten the job done.
"I thought it had the best chance of passage with full restoration in the final analysis if it was part of this bill," Norris said.
Haslam and other supportive Republicans said the proposal's tax cuts would offset the gas tax increases for consumers — 6 cents per gallon over the next three years and 10 cents per gallon on diesel over the same period.
The bill is estimated to generate another $350 million for road funding. However, it is also expected to cut other taxes by $400 million. They include a 20 percent reduction in the sales tax on groceries, a $113 million cut in corporate taxes paid by manufacturers and a 1 percent reduction in the tax on earnings from stocks and bonds.
The bill lists nearly 1,000 projects that would be funded with the new revenue.