New England states move ahead with fuel tax increase plans

By Keith Goble, Land Line state legislative editor | 4/3/2013

Two New England states are moving closer to changes that would raise revenue to benefit road and bridge work.

A proposal to nearly double fuel taxes in New Hampshire to pay for road and bridge work is halfway through the statehouse. One project that would benefit is widening work on Interstate 93.

The state’s 18-cent-per-gallon tax has not increased since 1991.

House lawmakers voted 206-158 to advance a bill to the Senate that would increase the tax rate by 12 cents per gallon.

The gas tax rate would increase to 30 cents over three years. The diesel tax rate would be increased over six years.

Proponents say that something needs to be done to address a funding shortfall that state transportation officials put at $1.3 billion during the next decade.

Rep. Patty Lovejoy, D-Rockingham, said she supported the bill because good infrastructure is essential for the state to compete with other states for business and jobs.

“New Hampshire’s highway system is our economic lifeblood – supporting commerce, tourism and our everyday lives,” Lovejoy said in written remarks.

The 10-year, $750 million bill would protect the new money from being used for anything other than state and local roads and bridges. The state would continue to route a portion of the existing tax to other state agencies.

HB617 awaits consideration in the Republican-led Senate where another funding method is favored. Specifically, GOP lawmakers prefer a plan to pay for transportation work by licensing a casino.

The Senate already voted 16-8 to advance a bill that would  tap proceeds from legalizing video slot machines and table games to help pay for transportation projects.

Gov. Maggie Hassan recently testified in support of the bill requiring a casino operator to pay $80 million for a 10-year license. The Democratic governor included casino revenue in her proposed budget.

SB152 awaits assignment to committee in the House.

Across the state line in Vermont, one bill would tap multiple methods to generate about $600 million for transportation work.

Citing fewer tax dollars available from the state’s fuel tax, House lawmakers advanced a bill to the Senate that would apply a 2 percent sales tax on fuel. The change would add nearly 7 cents to the per-gallon tax rate.

In July 2014, the sales tax would double to 4 percent. The following year, the tax rate would be tied to the consumer price index, which would allow for regular increases. At the same time, the state’s 19-cent-per-gallon excise tax rate would drop by 5.9 cents to 13.1 cents.

The tax changes sought in H510 would result in a net tax increase of about 7.6 cents per gallon. Additional revenue for the state would amount to about $26 million by 2015.

The Senate Transportation Committee is expected to take up the bill for consideration soon.

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

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