The House Ways and Means Committee voted 11-7 on party lines Tuesday to cut the proposed 15-cent gas hike to 12 cents over three years.
The revised gas tax would increase 4 cents in each of the next three fiscal years for gasoline and 2 cents over the next six fiscal years for diesel fuel.
Proponents of House Bill 617 said the money is needed to fix the state's crumbling highways and bridges, which have fallen further and further in disrepair since the tax was last increased in 1991.
But opponents argued the increase is too much and comes at the wrong time, affecting those least able to afford it.
The prime sponsor of the bill, House Public Works and Highways Committee Chair David Campbell, D-Nashua, called the vote a reasonable compromise that makes the bill stronger.
"It works and it's probably more politically appealing to the members," he said. "This will stop the crisis and start us moving in the right direction."
Committee member Rep. Laurie Campbell, R-Bedford, said the "whopping tax increase" comes at the wrong time, with the struggling economy.
"When you raise a tax, all prices go up not just gasoline," she said. "Further burdening our business community and forcing our consumers to pay more at the pump is a step in the wrong direction."
Other Republicans on the committee said they were nervous about the size of the increase. They suggested a two-year increase to fix the highway system and then see how much progress has been made.
"I just know if you throw a lot of money at government," said Rep. Patrick Abrami, R-Stratham, "it all doesn't get spent wisely."
But committee vice chair Patricia Lovejoy, D-Stratham, objected, saying the Department of Transportation has done a good job of spending the money very efficiently.
"You cannot maintain roads in 2013 on the rates of 1991," she said, noting the state does not control many costs such as asphalt, which has increased 450 percent since 1991.
Last week after two-and-a-half hours of debate, the House voted 207-163 to approve House Bill 617, which at 15 cents a gallon would raise $980 million over the next 10 years.
The proposal for a 12-cent increase would raise $633.8 million over 10 years.
The bill would provide $183 million for cities and towns to fix their roads and bridges and $110 million of the $130 million needed to take care of the state's red listed bridges.
The plan would also cover the cost of the final phase of the Interstate-93 expansion project from Manchester to Salem.
Dropping the tax from 15 to 12 cents would eliminate money to add projects to the state's 10-year highway improvement plan.
Earlier in a subcommittee meeting, two amendments were defeated. One would have stopped the diversion of highway fund money adding about $75 million a year for roads and bridges. The proposal came from former House speaker Bill O'Brien, R-Mont Vernon.
The other amendment the subcommittee rejected would have reduced the increase to 4 cents next year and 3 cents the year after.
The subcommittee did approve reducing the tax from 15 to 12 cents. "This is not getting us every where we need to be," said Lovejoy, "but it gets us a lot closer."
The proposed bill adopted by the committee includes a commission to study alternatives to the gas tax, due to the greater efficiency of automobiles and the growing popularity of alternative fuel vehicles.
A similar committee met last year but ended before any recommendations were made.
The bill, which is expected to face an uphill battle in the Senate, will be voted on by the House next week.