You’ve seen the orange barrels. They’re basically the state flower of Tennessee at this point. If you live in Nashville, Knoxville, or even just commute through the split in Chattanooga, you know the drill: traffic that feels more like a parking lot than an interstate.
Honestly, the state is growing so fast that the old ways of paying for asphalt just aren’t cutting it anymore. That’s why Governor Bill Lee pushed through a massive shift in how we handle our streets. It’s officially called the Transportation Modernization Act (TMA), but most people just call it the "Choice Lanes" bill or the Lee road plan.
There is a lot of noise about what this actually does. Is it a tax hike? Are we getting toll roads like Florida? It’s kinda complicated, but here is the ground truth on the tennessee roads funding proposal lee championed and what it means for your morning commute in 2026.
The Massive $26 Billion Headache
Tennessee has a problem that’s actually a result of its own success. People are moving here in droves. We hit 7 million residents recently, and our GDP is skyrocketing. But while the people came, the roads stayed the same size.
TDOT—the Tennessee Department of Transportation—flagged a staggering $26 billion gap in what we need versus what we have to fix congestion. For years, the state relied on the IMPROVE Act of 2017, which bumped the gas tax. But gas taxes are a dying breed. Cars are more efficient now, and everyone is buying EVs. If nobody is buying gas, nobody is paying for the potholes.
Governor Lee’s proposal wasn't just about finding a few extra bucks. It was about a total overhaul. He didn't want to raise the gas tax again because, let's be real, that's political suicide in a red state. He also didn't want the state to take on debt. Tennessee is weirdly proud of its "pay-as-you-go" status. So, the administration had to get creative. Or, as some critics say, they had to get "privatized."
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Choice Lanes: Not Your Grandpa’s Toll Road
This is the part that gets everyone fired up. The tennessee roads funding proposal lee introduced the concept of "Choice Lanes."
What are they? Basically, they are new, additional lanes built next to the existing ones. If you’re in a rush to get to a Titans game or your kid's graduation, you pay a fee to jump into the fast lane. If you don't want to pay, you stay in the general lanes for free.
TDOT is very insistent: these are not toll roads. The distinction is that on a toll road, everyone has to pay to use the path. Here, you only pay if you want the "premium" experience.
The first big test case is the I-24 Southeast Choice Lanes project between Nashville and Murfreesboro. That stretch of road is a nightmare. The plan is to add two priced lanes in each direction for about 26 miles. By 2026, the state expects to have a private partner locked in to start the heavy lifting.
How the money actually flows
This isn't just the state writing a check. It’s a Public-Private Partnership (P3).
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- A private company designs, builds, and finances the lanes.
- They take the risk of the construction costs.
- In exchange, they get to keep a chunk of the user fees (the tolls) for a few decades.
- The state keeps ownership of the land.
It’s a way to get billion-dollar projects done without the state having to find $15 billion in the couch cushions today.
The $3.3 Billion Cash Injection
While the Choice Lanes grab the headlines, the tennessee roads funding proposal lee also included a massive one-time transfer of $3.3 billion from the state's General Fund.
That is "real" money—taxpayer dollars from the surplus—not future toll revenue.
The idea was to spread this cash across the four TDOT regions. Urban areas get the fancy Choice Lanes (mostly funded by private partners), while the state’s $3.3 billion goes toward rural bridges, bypasses, and widening projects in places that would never support a toll.
In the FY 2026 budget, Lee didn't stop there. He proposed another $1 billion transfer from the General Fund to the Highway Fund. Why? Because construction costs are insane. Inflation has eaten the 2017 gas tax hike for breakfast. Without these transfers, TDOT would basically be treading water just trying to fix existing bridges, let alone building new ones.
The EV Fee "Penalty"
If you drive a Tesla in Tennessee, you probably aren't a fan of Bill Lee right now. Part of the funding proposal involves making EV and hybrid owners pay their "fair share" since they skip the gas pump.
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The annual registration fee for electric vehicles is climbing. It’s hitting $274 in 2026. For perspective, that makes Tennessee one of the most expensive states in the country to own an EV.
Hybrids and plug-in hybrids aren't safe either; they got hit with new $100 fees.
The state’s logic is simple: a heavy EV wears down the road just as much as a gas car. Critics, however, argue that this disincentivizes people from buying Tennessee-made EVs (like the ones coming out of the Spring Hill or BlueOval City plants). It’s a weird tension—the state wants to be the EV capital of the South, but it also wants to tax them to keep the roads paved.
What Critics Are Actually Saying
It’s not all sunshine and smooth pavement. There’s some serious pushback.
One of the biggest gripes is about local control. The Transportation Modernization Board, a five-member group created by the act, has a massive amount of power. They can basically decide where these Choice Lanes go without needing a "thumbs up" from local mayors or city councils.
Democrats and some local leaders are worried this will lead to "Lexus Lanes"—infrastructure that only the wealthy can afford to use, while everyone else stays stuck in the same old traffic.
Then there’s the "incompetence" argument you’ll hear in every coffee shop from Memphis to Bristol. People are frustrated that projects take 15 years to finish. The TMA is supposed to fix this by allowing "Alternative Delivery" methods (letting contractors move faster with less red tape), but until the first Choice Lane actually opens, people remain skeptical.
What Happens Next for You
If you’re wondering when your commute actually gets better, keep an eye on the 10-Year Project Plan. This was a requirement of the funding proposal. For the first time, TDOT actually has a list of "what gets started, gets finished."
- Check the Map: TDOT has a public 10-year plan dashboard. If your local bottleneck isn't on it, don't expect a fix this decade.
- Watch the I-24 Bids: The "Request for Proposals" for the Nashville-Murfreesboro Choice Lanes is the bellwether. If a private company jumps in, the model works. If not, the state might have to go back to the drawing board.
- Budget for Fees: If you’re an EV owner, expect that registration bill to stay high. There’s no sign the legislature is backing down on those fees.
- Tire Tax Changes: Keep an eye on a new proposal to divert sales tax from tires directly to the Highway Fund. It’s another $80 million a year that Lee wants to shift to keep the asphalt flowing.
The tennessee roads funding proposal lee put in motion is a gamble that the private sector can solve what the public sector couldn't afford. Whether it works or just creates a two-tiered highway system is something we’re going to find out in real-time as the bulldozers start moving.