Casino, Gas Tax Face Off in N.H.

West Lebanon — Granite State lawmakers looking for new sources of revenue are preparing for a showdown in Concord over whether to approve a casino, a higher gas tax, neither, or both.

The state Senate last week voted 16-8 to establish a casino in southern New Hampshire that would raise money for the state’s highway fund, but its chances of passing the House are questionable. The bill allows the state to levy a 30 percent tax on slot machine betting, and dictates that 25 percent be split between road and bridges projects, state aid to higher education, and North Country economic development.

Earlier this month, the House passed a preliminary version of a bill that would net just under $1 billion over 10 years through raising the per-gallon gas tax by 15 cents over four years, with all of the revenue slated to go directly to the highway fund. The legislation has since made its way to the House Ways and Means Committee, where it is likely to be scaled back in order to increase its chances of passage, but the notion of a gas tax increase appears to have little to no support in the Republican-controlled Senate.

State Sen. David Pierce, the Etna Democrat who represents the heart of the Upper Valley, said yesterday that the House and the Senate will likely have to find a way to strike a compromise not just on one issue, but two.

“I think that you’re either going to see a gas tax and a casino, or neither one,” said Pierce. “I just think that’s the way the sausage is made, and that might be how it works out.”

There are some exceptions to the Senate’s support for expanded gambling. Notably, three of the eight “no” votes came from the state senators who represent the Upper Valley. Pierce voted against the casino bill along with state Sen. Bob Odell, R-Lempster, and state Sen. Jeanie Forrester, R-Meredith.

While Pierce has expressed strong support for the gas tax bill filed by state Rep. David Campbell, D-Nashua, Odell and Forrester have said they would not vote for any increase in the gas tax, whether scaled back or not.

“I don’t see us passing a gas tax increase in 2013,” Odell, the Senate Ways and Means chairman, said yesterday, of the upper chamber.

Forrester echoed that sentiment, though she said she would need to see a final draft of the bill before definitively withholding support. She added that, out of the 27 communities she represents, nobody has said they wanted a gas tax increase.

“I listen to people talk about how bad the roads are, and when I asked the question (of a gas tax increase), they said no,” said Forrester. “And they said no because they don’t believe that the money raised through the gas tax would go to help the community.”

Democrats in the 400-member House, meanwhile, have said they don’t see a casino bill surviving a vote there.

“I started out thinking the other way, and now I’m seeing more people that I thought would be going toward the casino going away from the casino,” said House Ways and Means Chairwoman Susan Almy, a Lebanon Democrat. “But we haven’t had the real pressure put on us yet, we don’t have the bill in front of us yet.”

Depending on the outcome of the House casino vote, Almy said there could be a “totally different dynamic in the committee of conference on the budget,” referring to a joint session between the Senate and the House where the budget is decided.

“I expect the committees of conference to be very long and very difficult,” said Almy.

Etna resident Jim Rubens, a former state senator who chairs the Granite State Coalition Against Expanded Gambling, described the House as “less susceptible to the political winds in Concord, which sometimes blow violently in the wrong direction,” than the Senate.

He said that, for many years, the “pro-casino forces” have had a strategy to narrow the debate by avoiding any other options to raise state revenue.

That way, Rubens said, “the budget conferees at the very end in June are forced to swallow casinos.”

“It’s not that the Senate has passed this on a rationale basis ... it’s that they are bound and determined to remove those other options from the table,” he said.

But Rubens said there were other viable options for revenue, as evidenced by the House’s preliminary passage of the gas tax. He also questioned the reliability of casino revenue.

“If you look at the history of casino licensing in other states over the past decade, no state has been able to get casino money flowing into the general fund faster than (in) two years,” he said.

Some Upper Valley Democrats yesterday expressed reluctant support for the casino bill, such as state Rep. Andy Schmidt, D-Grantham. While Schmidt favored the proposed gas tax increase, describing it as “cut and dry,” he said that the casino proposal was a more difficult decision.

“It’s not a clear cut thing,” said Schmidt. “I don’t like casino gambling, I actually oppose it. The problem is that, given the current political situation, I’m almost driven to vote for it.”

Given the fact that an anticipated $80 million in revenue from the casino’s licensing fee was included in Democratic Gov. Maggie Hassan’s 2014-2015 budget proposal as a revenue source that would funnel money to the general fund, Schmidt said House Democrats have been placed in a situation where “any discretion in the budget is contingent upon passing gambling.”

“If we’re going to have money for the state university system, or mental health, or whatever, it seems like I have to vote for it whether I like it or not,” he said. “And I don’t like being in that box.”

As for whether the casino proposal would actually pass the House this year, Schmidt gave that a “50-50 chance, and it’s time to have an open debate about it.”

Flip that situation on its head, and you more or less have the conundrum facing state Rep. Rick Ladd, a Haverhill Republican who said he has always been supportive of one gambling casino in New Hampshire as source to generate revenue for the general fund.

But Ladd has reservations about a 15-cent increase in the gas tax, which he said places a disproportionate burden on working families who depend on their cars to commute to work — a demographic he said Haverhill has plenty of.

“It hasn’t been raised in a long, long time, but I can’t support doing it to the degree we’re doing it,” said Ladd. “I don’t think our families up here in Haverhill could sustain that.”

New Hampshire last raised its gas tax in 1991.

State Rep. Ray Gagnon, D-Claremont, said he supports both proposals, and stressed that a broad-based income or sales tax would solve a lot of the revenue problems the state is facing, which he said stems from a reliance on property taxes.

But Gagnon conceded that changing the state’s tax structure wasn’t likely to happen anytime soon, and, confronted with that reality, casino gambling would be a way to make up some of the shortfall.

“I think the governor, to her credit, is saying we need to fund some vital services ... and this is a way of garnering some additional revenue to do that,” he said. “Where else are we going to get the money?”

Ben Conarck can be reached at or 603-727-3213.