New Hampshire bills would boost road funding via fuel tax increase

| 2/10/2009

Multiple measures offered for consideration in the New Hampshire statehouse would cost truckers and other drivers more at the fuel pump. The legislation includes boosting the fuel tax and rerouting tax earnings.

Concern about how to fund road and bridge work led Rep. David Campbell, D-Nashua, to introduce a bill – HB644 – that would increase the state’s tax rate on the purchase of gas and diesel by 15 cents per gallon.

The state’s 18-cent-per-gallon fuel tax is the main source of revenue for the struggling road budget. Officials with the New Hampshire Department of Transportation say the agency is on track for a $1 billion shortfall in the state’s 10-year highway plan.

In an effort to eat into the funding gap, Campbell’s bill would phase in the increases by 5-cent increments each of the next three years until it reaches 33 cents per gallon in the spring of 2011.

The additional revenue would be dedicated for repairs and construction of roads and bridges throughout the state. Towns and cities are in line to receive a 12 percent share of the fuel tax – $15 million annually.

However, the likelihood of getting a tax increase approved by Gov. John Lynch doesn’t appear to be favorable. The governor has opposed raising the tax in the past, and Lynch recently said he hasn’t changed his mind.

Factors that are contributing to the funding crunch include costs for road-building materials, which have skyrocketed during the past few years. To make matters worse, fuel tax revenue is down because people are driving less. As a result, fuel consumption in the state is off nearly 4 percent, the Concord Monitor reported.

To help ease the funding gap, a separate bill would allow for automatic fuel tax increases. Sponsored by Rep. Gene Anderson, D-Lebanon, HB124 would index the fuel tax to inflation. The tax rate would be adjusted annually.

According to a fiscal note on the bill, each penny increase is expected to generate more than $8 million for highways. Towns and cities would get a 12 percent share.

Proving that even small amounts can be viewed as helpful, Rep. Candace Bouchard, D-Concord, offered a bill that would route more than $10 million a year for highways. Her bill – HB672 – would send a 1.6-cent tax on fuel to help cover the costs of oil spills to roads.

HB124 and HB644 are in the House Public Works and Highways Committee. HB672 is in the House Ways and Means Committee.

To view other legislative activities of interest for New Hampshire in 2009, click here.

– By Keith Goble, state legislative editor

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