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December 6, 2013

N.H. drivers could see 4- to 5-cent gas tax hike

Proposed 4 cents or more increase would go to improve roads, bridges

The chairman of the Senate Transportation Committee is proposing an increase in the state’s gas tax to improve roads and bridges.

Sen. Jim Rausch, R-Derry, said he will have bipartisan support for his bill that would link the tax to the consumer price index and likely cost drivers at least 4 cents more per gallon.

The state’s so-called “road toll” is 18 cents a gallon now, so drivers would pay at least 22 cents.

Rausch said the tax was last increased in 1991, and inflation has since reduced the state’s purchasing power when it comes to highway construction.

“My whole goal is to help restore the purchasing power we have lost,” Rausch said.

Rausch’s bill would allow an increase next July and again four years later. It would also set up a mechanism for future increases every four years.

Increases would be determined through a formula reflecting inflation in consumer prices.

The precise increase next July will be determined by an analysis involving the consumer price index at year’s end.

Rausch expects the number to be firmed up around February. But he’s already taken a preliminary look using figures generated this fall.

“It will certainly be under 5 cents and potentially under 4.5 cents,” Rausch said.

It was important to Rausch to consider what has happened in the economy over time.

“This is not arbitrary. It is based on what’s happening in the economy,” he said. “Eighteen cents in 1991 is not equivalent to 18 cents in 2013.”

Drivers were paying $1.14 a gallon on average in 1991, so the tax represented 15.8 percent of the price then, he said.

This year, drivers paying $3.20 a gallon on average, are seeing the tax represent 5.6 percent of the price, in Rausch’s analysis.

The senator estimates the proposal would bring in $30 million per fiscal year in revenue.

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