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Sen. Rausch wants state's gas tax tied to consumer price index

State House Bureau

December 05. 2013 9:21PM

CONCORD — The Senate Transportation Committee's chairman wants to use a consumer-price-index formula to bump up the state's gas tax to fix roads and bridges.

Under the formula, the state's 18-cent gas tax would increase about 4.2 cents a gallon and produce about $30 million in new revenue for transportation projects. The formula would be reapplied every four years to adjust the gas tax to align with inflation.

The bill's sponsor, Sen. Jim Rausch, R-Derry, said the increase would be set in February when the 2013 consumer index is established, but believes it will be slightly more than 4 cents.

"I'm trying to restore the purchasing power that has been eroded since the last tax increase in 1991," Rausch said. "I want to be very clear this is a small step," adding he is a strong supporter of legalizing casino gambling and using a significant portion of the revenue for roads and bridges.

Rausch co-sponsored Senate Bill 152, which legalized one casino in southern New Hampshire. The bill passed the Senate, had the backing of Gov. Maggie Hassan, but was killed in the House.

Rausch said a tax and a non-tax component are necessary to address the state's highway infrastructure issues. The increase in the gas tax, which Rausch said is technically a user fee, would be modest, which is why he went back only a decade to adjust for inflation and not back to 1991.

"Going back to 1991 would be excessive," Rausch said. "I want to be successful and not have such a large increase it would doom the process."

And he said he understands some of his Senate colleagues are uncomfortable voting for the proposal in an election year. "I do not want to put anyone in harm's way," Rausch said.

Under Rausch's proposal, the state Department of Transportation would determine where to spend the money. "I'm offering a solution," he said. "I'm not telling the department what to do or what not to do."

Department officials have said they will need about $50 million in fiscal year 2016 to avoid significantly downsizing the department, closing sheds and district offices and impacting road conditions.

However, Senate President Chuck Morse, R-Salem, said the state does not need to increase the gas tax, but rather the transportation department needs to learn to live within its means.

Bob Scully, president of New Hampshire Motor Transport Association, said his group's position has not changed on a gas tax increase. It opposes it.

He noted earlier this week he had not seen the bill, but said any attempt to index the gas tax to inflation would be dead on arrival for his organization.

Last session, Rausch voted with his fellow Republicans and five Democrats to kill a proposed 12-cent increase in the gas tax over three years, after he was given assurances from then-Senate President Peter Bragdon, R-Milford, he would be able to bring a proposal forward in the 2014 session to address transportation system needs.

Republicans in the Senate used a parliamentary procedure to block any discussion of a gas tax increase for the remainder of the two-year term, but the Senate president has the discretion to decide if a new proposal is different enough to bypass the ban.

Bragdon has since resigned as president after he accepted a position with the Local Government Center, and Morse has said he will allow Rausch's proposal to come before the Senate next session. However, Morse said gas tax increases hurt those least able to afford to buy gas. He supports using 45 percent of the state's share of money generated by a casino for transportation projects including the expansion of Interstate 93 between Salem and Manchester, which needs an additional $250 million to complete.

Last year, House Public Works and Highways Committee Chairman David Campbell, D-Nashua, proposed a 15-cent gas tax increase over five years, which was whittled to a 12-cent increase over three years before it passed the House by a slim margin. The Senate killed the bill.

With no gas tax increase in the last 22 years, transportation officials say the state's highway system faces a catastrophic situation.

Rausch said he wants to restore some of the purchasing power the state has lost since 1991 when the average cost of a gallon of gas was $1.14. At that time, 16 percent of what someone paid per gallon supported the highway system, while today highway support is only 5.6 percent of $3.20 average cost, he said.

"That is a significant erosion of that portion to maintain our highway system," Rausch said. "If we use the highways, we have an obligation to make sure they are up-to-date and in good condition."

Last session before killing the gas tax bill, he told his Senate colleague something had to be done to fix the state's roads.

"If we can't do that," said Rausch, "then none of us should run again."

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