Michael C. Whitney: A small gas tax hike would be good for businessBY MICHAEL C. WHITNEY
March 05. 2014 4:23PM
No one likes to pay taxes and fees, and as a business advocacy organization you won’t often hear us advocating for their increase, but roads and bridges are the lifeblood of New Hampshire’s economy. They facilitate the movement of raw materials to and finished products from our manufacturing sector — the largest sector of the state’s economy. They further facilitate the movement of the many tourists who visit our state each year and who make tourism the second largest sector of our economy.
Businesses large and small not only benefit, but depend on a well-functioning network of roads and bridges, allowing the movement of not just goods and services, but also of the employees who produce these goods and perform these services. Investing in better roads and bridges is short money and an investment that will offer a very high return, to residents, businesses and the state as a whole.
This network is falling apart before our eyes. The number of red-listed bridges and highway miles rated in poor condition continues to grow faster than our ability to pay to repair them. To say the least, the results of this lack of investment are troubling to the greater Manchester business community and our future economic development prospects. Also troubling is our elected leaders’ inability to find a sustainable funding solution to ensure that our state’s surface transportation needs are adequately met now and in the future.
That’s why the Greater Manchester Chamber of Commerce is pleased to see real leadership on this issue from state Sen. Jim Rausch, R-Derry, the prime sponsor of Senate Bill 367, which, as amended, would provide a one-time 4-cent increase — the first increase to the road toll (often referred to as the gas “tax”) since 1991.
It is acknowledged that Sen. Rausch’s proposal, which was passed by the Senate Ways & Means Committee by a 4-1 vote on Tuesday, is only a partial solution, but it is a step in the right direction, and that’s why the Greater Manchester Chamber of Commerce Board of Directors voted unanimously to support Senate Bill 367.
The road toll is currently 18 cents per gallon, where it has remained since the last time it was increased 23 years ago. Back then, the average price for a gallon gas in this state was $1.14. This equated to a gas tax rate of just under 16 percent. This week, however, gas is hovering around $3.39 a gallon in Manchester, making the per-gallon tax rate about 5.3 percent — or two-thirds less than it was in the early 1990s.
Coupled with inflation and more fuel-efficient vehicles on the road, not to mention changing driving habits that are resulting in fewer vehicle miles traveled, the state has less and less revenue with which to adequately maintain our roads and bridges. The money we do have has much less purchasing power than it did in 1991— the price of asphalt increased 460 percent between 1992 and 2012. Increases have also been seen in the prices of gasoline, diesel and road salt, to name a few.
Our state has been able to coast by on unsustainable one-time fixes for a number of years now. But we’re about out of options. The New Hampshire Department of Transportation further estimates that roads in need of repair cost each state motorist an average of $330 per vehicle each year. A 4-cent increase in the road toll, by contrast, will see the average motorist pay an extra $16 per vehicle each year. That’s what we call short money in the business world. But as noted above, a 4-cent increase is not enough to adequately address the state’s surface transportation needs. By amending Senate Bill 367 to remove indexing the amount of road toll to the rate of inflation, the Senate Ways & Means Committee left the responsibility of finding a permanent solution to future legislators. Here’s hoping it won’t take another 23 years before this critical business issues is addressed again.
Michael C. Whitney is interim president and CEO of the Greater Manchester Chamber of Commerce.