Governor Haslam is proposing legislation that would raise the state's gas tax in an effort to pay for transportation needs.

The "IMPROVE Act," would raise the gas tax by seven-cents per gallon. It would bring the total tax on regular gas in Tennessee to 28-point-four cents a gallon. It would add about 278-million dollars in new revenue for road improvement projects.

The proposal would also tax diesel by 12-cents a gallon. In addition, car registration fees would increase by five-dollars and place a 100-dollar annual fee on electric cars and another three-percent charge on rental vehicles.

As part of the IMPROVE Act, Tennessee would no longer be an open container state, which would make it illegal for passengers in a moving vehicle to consume alcohol. This would mean an increase in federal funds by 18-million dollars.

The governor says the state has about 11-billion dollars in backlogged road projects and this plan would help fund over 960 projects statewide. The last time the gas tax was raised was 1989 to the current rate of 21-point-four cents per gallon.

Governor Haslam also announced with this cutting 270-million dollars in taxes on businesses and a reduction to the grocery tax from five-percent to four-and-a-half percent. That would be a loss of revenue of about 55-million dollars. The cuts would be offset by the state's two-billion dollar surplus.