EagleTribune.com, North Andover, MA

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

By John Toole
jtoole@eagletribune.com

---- — 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.

Rausch was not ready to disclose co-sponsors, but he said lawmakers from both parties will support his bill.

“I will have Republicans and Democrats going with me,” he said.

One who has already said he will oppose a gas tax increase is Senate President Chuck Morse, R-Salem.

But opposition will not deter Rausch, he said.

“I’m looking at offering a solution to the problem. We do not have enough revenue. If people have a better answer, so be it,” Rausch said.

“I’m trying to solve the problem, put logic behind it and trying not to be arbitrary.”

Gov. Maggie Hassan, a Democrat, since taking office has indicated she would be receptive to a gas tax increase or some other highway funding alternative if the Legislature approves one.

“The governor appreciates the constructive ideas put forward by members of both parties, including Republican Sen. Jim Rausch, to invest in critical road and bridge projects like the widening of I-93, which will soon shut down without additional funds,” Hassan spokesman Marc Goldberg said.

The Democrat-controlled House last session approved a 12-cent increase in the gas tax on a 206-158 vote, only to have the Republican-controlled Senate reject it, 18-6.

Massachusetts this year approved a 3-cent increase to 24 cents a gallon and made future increases automatic, based on the rate of inflation. But an effort is under way to pass a referendum that would bar automatic future increases pegged to inflation. Opponents argue the Legislature should be required to vote each time on any tax increase.

Though commonly referred to as a gas tax, a New Hampshire Supreme Court opinion in 1967 said the motor vehicle road toll is not really a tax upon the sale or consumption of fuel but a fee imposed for use of public highways.