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New Hampshire Needs to Increase Gas Tax

Durham, N.H.

After lengthy debate on March 6, the N.H. House passed HB 617, a bill that increases the road toll, commonly referred to by opponents as the gas tax, by 4 cents per gallon of gasoline in each of the next three years (fiscal years 2014 through 2016) and then 3 cents in fiscal year 2017, for a total 15-cent increase over the current road toll of 18 cents per gallon. It is referred to as the 4-4-4-3 plan with Rep. David Campbell of Nashua as the prime sponsor.

This additional revenue would be placed in a separate fund within the constitutionally protected highway fund to be used exclusively for the construction, reconstruction and maintenance of state and municipal roads and bridges — investment that will equate to good jobs across New Hampshire, particularly within the construction, engineering, paving and aggregate industries.

Projections show the modest change in the road toll would result in increased highway block grant funding for municipalities of $3.6 million in 2014 to over $13 million in 2017 and beyond, for a total increase of $117 million over the next 10 years.

For communities working diligently to stabilize local tax rates across the Granite State, this increase is significant. To put it into concrete terms, the 4-4-4-3 plan would mean an additional $3 million for Concord; $949,000 for Durham; $1.7 million for Keene; $1.1 million for Laconia; $6.9 million for Manchester and $5.4 million for Nashua — to choose a few communities in the state. Local taxpayers in every town and city across New Hampshire would benefit from the 4-4-4-3 plan.

But much needed additional revenue for municipalities targeted to roadway repairs is not all that this bill provides. The increase would also fund an additional $8.5 million per year for municipal bridge and highway aid programs, fully fund the I-93 widening project, fully fund the state’s grossly underfunded 10-year transportation plan, and provide resources to address the 1,600-plus miles of state roads currently rated in “poor” condition.

The road toll is a true user fee that has not been increased in over 20 years. If the citizens of New Hampshire want decent roads, someone will have to pay for them, and it is only appropriate that the cost be borne by the users. Those who drive less would pay less; those who drive more would pay more.

The House Ways and Means Committee voted on March 20 to recommend reducing the road toll increases from 4-4-4-3 over the next four years, to simply 4-4-4. This is a mistake. Full implementation of the 4-4-4-3 plan is reasonable and necessary to meet the state’s transportation needs. Here is why.

At 18 cents per gallon, New Hampshire’s road toll is currently the lowest in New England.

An important aspect of the road toll is that it does not translate penny for penny at the pump. Drive into Maine with a higher gas tax than New Hampshire, and you can find lower gas prices there. This is because supply and demand is the primary driver of gas prices, not the road toll. When the average driver drives 12,000 miles per year, getting an average of 22.6 mpg, it will cost an additional $79.65 per year after the 15 cents increase is fully implemented. This cost is based on the assumption that the 15 cent increase passes through penny for penny at the pump, which is unlikely.

Even assuming that every penny is passed onto the driver at the pump, the cost of $79.65 is less than what the average New Hampshire driver is currently spending on vehicle maintenance and repairs due to poor road conditions ($323 annually), as reported by TRIP, a national transportation group. And in some areas of the state it is worse. The average driver in the Southern New Hampshire area, including Manchester and Nashua, loses $503 annually due to driving on deteriorated roads, while rough roads cost the average Dover-Rochester-Portsmouth driver $400 annually.

New Hampshire faces an annual transportation funding shortfall of $74 million, more than one third of the state’s major roads are deteriorated, nearly a third of Granite State bridges are in need of repair or replacement, and the state’s rural traffic fatality rate is disproportionately higher than that of other roads in the state. Unless New Hampshire can increase transportation investment, conditions are projected to worsen significantly in the future. This serves none of us well and works against the New Hampshire Advantage.

HB 617, at the 4-4-4-3 level, is a good plan and deserves the support of the Legislature.

Todd I. Selig, originally from Laconia, has served as Durham town administrator since 2001. He has served in a variety of New Hampshire administrative positions within both the municipal and school sectors, including positions in Raymond, Laconia, New Boston and Hopkinton.