Higher Gas Tax: Shumlin, Yes; Hassan Hedges
Gov. Maggie Hassan watches as Hypertherm CEO Dick Couch uses a torch to cut a ribbon during the opening of a new facility in Lebanon yesterday. (Valley News - Jennifer Hauck) Purchase photo reprints »
Gov. Maggie Hassan, center, speaks with Barbara Couch, vice president of corporate social responsibility at Hypertherm, state Sen. David Pierce and Dick Couch CEO of Hypertherm for the grand opening of Hypertherm’s new Heater Road facility. (Valley News - Jennifer Hauck) Purchase photo reprints »
Vermont Gov. Peter Shumlin. (Valley News - Peter Shumlin) Purchase photo reprints »
West Lebanon — The Twin State governors were in the Upper Valley for different reasons yesterday, but both Democrat executives weighed in on proposals in Vermont and New Hampshire to raise taxes on gasoline sales.
While New Hampshire Gov. Maggie Hassan hedged her stance on a gas tax increase pending action in the Legislature in Concord, Vermont Gov. Peter Shumlin spoke enthusiastically about the need to raise the tax in order to make up for a loss of revenue that has accompanied a decline in the volume of gasoline sold in the state.
“When we talk about raising gas taxes in Vermont and New Hampshire and other states, we’re not talking about raising more money,” Shumlin said in an editorial board meeting with the Valley News yesterday. “We’re talking about repairing the leaks in the bucket from money we used to collect that we don’t anymore.”
Shumlin’s administration has proposed raising the retail tax on gasoline sales by 4 percent in order to raise $36.5 million and close a budget gap for road repairs, thereby avoiding as much as $123 million in transportation budget cuts. The tax increase could ultimately lead to an 8 cent or more increase in the price per gallon at the pump.
The new sales tax would also increase automatically in line with the U.S. Consumer Price Index. Vermont currently collects just over 26 cents per gallon at the pump in state taxes.
Meanwhile, a bill filed by state Rep. David Campbell, D-Nashua, in the New Hampshire House would raise the gas tax by 4 cents a gallon each year over three years, which he said would cost the typical driver an additional $85 annually. Additionally, there would be a $5 surcharge on registration fees each of the three years.
The gas tax in New Hampshire has not been raised since 1991. Motorists in the Granite State pay 19.6 cents per gallon at the pump in state taxes, including an oil discharge tax. Increasing the gas tax by 12 cents over three years, along with the added registration fees, would raise $1 billion over the next decade, supporters maintain.
Meanwhile, the Republican-controlled state Senate has proposed legalizing video slots to raise money for highway projects.
While she wouldn’t say whether she would sign an increase in the gas tax, Hassan said that it was “really important” that the House and Senate were debating the issue, which has “focused people’s attention on the fact that we have a growing challenge in terms of meeting our long-term infrastructure needs.”
“We need a modern and a solid infrastructure in order to meet the needs of businesses in the 21st century, so I’m urging them all to develop a consensus around how we should go about funding our infrastructure needs, and I’m looking forward to that consensus developing,” she said.
Hassan’s comments came as she was attending the ribbon-cutting ceremony for the grand opening of Hypertherm’s $37 million facility, which opened in January on Heater Road and will ultimately employ about 500 people in advanced manufacturing jobs — an area of the New Hampshire economy that Hassan has highlighted in her economic messaging.
“We are focused on making sure that New Hampshire can lead the country in terms of an innovation economy, and so Hypertherm is a great example of a wonderful local business that is innovating in the product it develops, the way it organizes as corporation, and in the kind of building it does, so it’s a great example of what we can do in an innovation economy and how we can lead,” she said.
The Granite State proposal to raise the gas tax becoming a reality could make it easier for Vermonters to stomach a gas tax increase, given the across-the-border competition in both states.
Shumlin said it would be a “huge help to Vermont and New Hampshire if our gas prices aren’t radically different,” but he added that the federal government “should have raised the federal gas tax a long time ago.”
“But because they’re so dysfunctional, nothing has happened,” he said.
As far as the need to rebuild infrastructure, Shumlin stressed that even a tax increase wouldn’t solve all the problems for Vermont, a state with a population of 625,000 but one in which drivers are now burning 40 million gallons less of gasoline than they were burning “just a few years ago.”
“Since we know that the money we use to rebuild our roads and bridges and match the federal highway dollars comes from the number of gallons sold, we’re going to have to change the system,” he said.
Shumlin said that Vermont and other states would likely move to a “system that’s based upon the price of a gallon as opposed to the number of gallons that you use.”
Ben Conarck can be reached at email@example.com or 603-727-3213.
The following clarification appeared in the Wednesday, March 6 edition of the Valley News:
A bill before the New Hampshire House has been amended to raise the gas tax by a total of 15 cents per gallon over four years, and would have no effect on car registration fees. A story in yesterday's Valley News referred to proposals in the legislatoin as it was filed.