Alexander: Debt-Free Tennessee Transportation System an Example for the Rest of the Country

Says: “Instead of spending gas tax revenues on interest payments, we spend it on roads”

Posted on April 6, 2011

Our state has no road debt. None. The reason is that when we want to build a road, we raise the money and pay for it.”—Lamar Alexander

WASHINGTON – In a hearing today of the Senate Environment and Public Works Committee, where Paul Degges, chief engineer of the Tennessee Department of Transportation, served as a witness, U.S. Senator Lamar Alexander (R-Tenn.) described Tennessee’s debt-free process for funding road construction as an example for the rest of the country, saying, “Our state has no road debt. None. The reason is that when we want to build a road, we raise the money and pay for it.”

Alexander continued: “I can understand very well the argument for tunneling under the Hudson River. But … if you want to build a tunnel under the Hudson River, build it, just like we [built our own roads in Tennessee].’ …  If you live in an area where you have so much of the economic wealth – New York, Connecticut, and New Jersey – where building a tunnel will add to the value of the homes and businesses, then you’ve got a perfect argument to go out to the people and say, ‘Let’s build a tunnel,’ if that’s what you want to do. But I don’t think it’s a good idea to come down to Tennessee and say, ‘We want people in a state where you’re not as wealthy to send money to New York to build a tunnel,’ just as we didn’t come to you to say, ‘Send us money to build a road to Oak Ridge.’

Alexander recounted the road-building process during his term as governor of Tennessee: “Three times during the eight years I was governor, we saw an economic need to have a better road system. The auto industry was moving to the southeast and the suppliers were saying, ‘We need to make just-in-time deliveries and we’re going to base our location decision upon whether you have good four-lane highway systems.’… So we agreed on the road programs we wanted and then we asked, ‘How shall we pay for it?’ And we considered, should we borrow the money, or should we pay for it upfront?  We decided the fiscally responsible way was to pay for it up front and we did that by raising the gas tax; a decision that was broadly supported. The result has been that now a third of our manufacturing jobs are auto jobs.”

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