Legislative committees move 4.2-cent-per-gallon gas tax increase closer to reality
CONCORD – The 4.2-cent-per-gallon gas tax increase is one step closer to showing up at gas pumps July 1.
Tuesday the Joint House Public Works and Highways, and Ways and Means committees voted 26-11 to approve Senate Bill 367 after three Republican attempts to change the bill were voted down on close votes.
Public works chair Rep. David Campbell, D-Nashua, said the bill is the best chance of providing more money for the state’s crumbling highways and bridges.
The first increase in the gas and diesel tax since 1991, raising it from 18 to 22.2 cents per gallon, is projected to produce about $32 million a year in additional revenue, or about $588 million over the next 20 years.
All the money would be used to rehabilitate or maintain highways and bridges, and to complete the Interstate 93 expansion from Salem to Manchester.
Campbell said in the 23 years since the last increase, the price of goods needed for highways and bridges such as asphalt and steel have increased tremendously.
Without the additional revenue, he said, the state’s highway system will continue to decline. He noted one-third of the money will go to cities and towns, and much of the first two years of the increase will go to state roads and bridges.
But Republicans agreed roads and bridges need help, but they argued more needs to be done to stop the diversion of money from the state highway fund.
“Before jumping into one of the largest tax increases in recent history, we need to take a hard look at the intricacies of this bill and the system by which the revenue would be used,” said House Minority Leader Gene Chandler, R-Bartlett. “Republicans offered reasonable amendments to fix some of our concerns, but none were adopted.”
He said in the last two budgets, $38 million was diverted from the highway fund in excess of the allowable under state law.
“If the legislature can’t even follow a reasonable standing law regarding highway funds,” said Chandler, “how can people have any confidence in the laws we pass? People don’t have enough faith the money will go where we say it will go.”
After the first two years, 41 percent of the increase Included in the bill will go to paying off the bonds for the I-93 expansion. Campbell said the project is essential to the state’s economy and economic development and benefits the entire state.
“Not all the tourists stop in Derry or Windham,” Campbell noted.
But Campbell said most of the state will not see one penny of the money for expansion, noting the state’s 10-year highway plan already allocates $50 million for the expansion.
Under the bill the state would issue $200 million in bonds to complete the project, and more than 40 percent on the new revenue would go to pay off the bonds.
Republicans proposed removing the provision to eliminate the Exit 12 ramp toll on the F.E. Everett Turnpike in Merrimack. The ramp toll elimination is a key element for key senators including former Senate President Peter Bragdon, R-Milford, and Senate President Chuck Morse, R-Salem, who opposed the bill.
“We have addressed this in the state 10-year highway plan,” said Rep. John Graham, R-Bedford, who proposed the change.
When that amendment failed on a 16-15 vote, Graham proposed turning Continental Boulevard, which the state maintains, to the town of Merrimack. That amendment failed on an 18-17 vote.
An attempt to remove the bonding for the I-93 expansion failed on a 24-14 vote before the bill was approved on a 26-11 vote with six Republicans joining Democrats to approve the bill without changes.
After the vote, Robert Sculley, president of the N.H. Transport Association, which opposed the bill, said “This is just the beginning. You heard the chair, there is no money for operations,” referring to the Department of Transportation, which faces major layoffs in the future without more money.
“My concern is they will be back next year asking for more,” Sculley said.
Under the proposal, the increase would be repealed after $200 million in bonds are paid off over 16 to 20 years.
The agreement allows the state to secure about $80 million in Grant Anticipation Revenue Vehicle bonds or GARVEE bonds to replace the Sarah Mildred Long Bridge in Portsmouth, and use $40 million in federal funds earmarked for that project to help pay for the I-93 expansion.
Under the plan, $8 million would go back to cities and towns as highway block grants over the next two years, $20 million would go for highway rehabilitation, $26 million for resurfacing, and nearly $30 million over the next four years to fix red-listed bridges.
Under the proposal, a study committee would review the efficiency and effectiveness of the N.H. Department of Transportation.
The bill has the support of business groups, the construction industry and the N.H. Municipal Association.
The House will vote on SB 367 next Wednesday, April 23.
If the bill passes unchanged. it will go to Gov. Maggie Hassan, who has said she will sign it.