CONCORD — The Senate will hold a hearing tomorrow on a bill to increase the state’s gas tax.
Sen. Jim Rausch, R-Derry, chairman of the Senate Transportation Committee, wants to tie the gas tax to the consumer price index.
Senate Bill 367 is expected to increase the 18-cents-a-gallon tax by about 4 cents this July. It also would establish a mechanism that could boost the tax in future years based on economic conditions.
At 4 cents higher, it would bring in an estimated $31.9 million in additional revenue per year.
Rausch already has a powerful ally on his side.
“Thank you to Sen. Rausch for leading efforts to take an important step toward addressing our transportation needs,” Democratic Gov. Maggie Hassan said in her State of the State address this month. “I know that we can come together and work through this challenge. We can reach a consensus solution to renew our investment in safe and modern roads and bridges.”
Rausch acknowledged the governor’s support matters.
“It helps the process,” he said.
Rausch expects to have support from the business community, construction industry and hospitality interests.
“I think there is pretty broad consensus we have to maintain our infrastructure,” he said.
The state last increased the tax, also known in New Hampshire as the road toll, in 1991.
Over the winter, Rausch has made the case the state needs to invest in roads and bridges, and inflation has eroded its purchasing power over 24 years.
“I’m about trying to solve the problem,” Rausch said. “That’s why I’m doing this.”
He maintains the increase woudln’t hurt drivers. He estimates a 4-cent increase for a driver who travels 10,000 miles a year, and gets 25 miles per gallon, will amount to just $16.
“That is not a terrible imposition,” he said.
A bipartisan group of co-sponsors includes Rep. David Campbell, D-Nashua, chairman of the House Public Works and Highways Committee.
Campbell has twice tried to raise the gas tax to fund highway work.
Last year, the House passed his proposal to raise the gas tax 12 cents over three years, only to have the Senate reject it.
“The Senate has been the issue,” Campbell said.
He’s optimistic it could be different this time.
“I hear good things,” he said. “I think it has a good chance of passing the Senate.”
Campbell believes people are ready and willing to raise the gas tax.
“I found a lot of popular support for the bill,” he said.
Raush also is finding support from those who see the need for investing in highways.
“Individuals who believe we need to improve funding our infrastructure are still with me,” Rausch said.
But there is opposition.
Though Rausch is a fellow Republican, state GOP chairman Jennifer Horn took aim at the gas tax after Hassan’s speech, describing it as disastrous.
“A gas tax hike during tough economic times will punish working families, hurt small businesses and kill jobs,” Horn said.
Americans for Prosperity state director Greg Moore said his organization will continue to fight a tax increase.
“It has automatic tax increases built into it,” Moore said. “That removes future Legislatures from accountability with new gas tax hikes that will be cooked into the books.”
An increase in the gas tax also could hurt cross-border sales, Moore said.
“New Hampshire needs to be branded as having the lowest prices for all goods, not just some goods, and gas prices play a huge role in that,” he said.
Massachusetts increased its gas tax from 21 to 24 cents a gallon, while indexing it to inflation starting in 2015.
AAA Northern New England will endorse the proposal during the hearing, spokesman Patrick Moody said.
The Senate Ways and Means Committee will hold a hearing on the bill at 9 a.m. in Room 103 of the Statehouse.
Meanwhile, the House Public Works and Highways Committee will hear testimony on a bill that would de-emphasize the Interstate 93 widening as a funding priority.
The committee’s vice chairman, Rep. John Cloutier, D-Claremont, introduced the bill because he wants the Department of Transportation to have flexibility to fund other projects.
“There are other needs in other parts of the state that are being ignored,” Cloutier said last fall.
Lawmakers from the I-93 corridor in Southern New Hampshire, including Reps. Jim Webb, R-Derry, and Mary Griffin, R-Windham, have said they will oppose the bill.
So will Campbell.
He said I-93 is the main artery in the state and critical to its economy.
“I welcome the discussion to underscore and put in bold print how important I-93 is to us,” Campbell said.
The hearing is set for 10 a.m. tomorrow in Room 201 of the Legislative Office Building.