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Gas tax hike sponsor will move to make it a one-time, 4-cent increase; no ‘indexing’

Senior Political Reporter

February 27. 2014 7:25PM

CONCORD -- The chief sponsor of a controversial gas tax hike bill before the state Senate said Thursday he plans to propose a change that will remove its most unpopular component -- indexing future increases to the rate of inflation.

“I’m listening to the business community,” said Sen. Jim Rausch, R-Derry, told

Rausch said he will propose the change before the Senate Ways and Means Committee as it plans to vote Tuesday on a recommendation for the bill to the full Senate.

The bill, as introduced by Rausch, has two key parts.

First, it would initially increase the current 18 cent-a-gallon gas tax through a formula dividing the average Consumer Price Index for 2013 by the CPI for 2003. That comes out to slightly more than 4 cents a gallon.

Second, the original bill would keep that initial hike in place for four years. It would then increase the tax every four years beginning on July 1, 2018 through a formula related to the current and earlier CPIs.

Rausch said he will propose keeping in place the formula that produces the initial 4 cents-a-gallon hike, but removing the part of the bill calling for subsequent increases. He also said he will not call for a larger initial increase.

Rausch said he initially included the second part of the bill “because it’s been 23 years of nobody wanting to do anything” since the last gas tax hike in the state.

“I put it in there as a way that future legislators could look at it but perhaps make it less difficult for them to make decision on it,” he said. Future legislature would have had to act to stop the regular, four-year increases.

“But it’s very clear that the business community doesn’t like it,” he said. “And I’m very, very pro-business.”

While motor industry groups, such as the New Hampshire Motor Transport Association, oppose the bill in its entirety, the second, indexing-related section was especially unpopular in the broader business community.

The Business and Industry Association of New Hampshire earlier this week announced its board of directors voted to support “increasing funding for needed road and bridge repairs and maintenance by increasing the gas tax by $.04 per gallon.”

But the association said it is opposed the provision calling for future increases tied to the CPI.

“I’m listening to them,” said Rausch, not referring to the BIA specifically, but to the “business community” in general.

“If they feel is preferable to go through the battles in the future, then so be it,” he said.

Rausch said a four-cent increase, which is expected to generate about $30 million in new revenue for transportation projects, “isn’t going to be enough to do everything that has to be done.

“We’re still going to have to find something” to produce more revenue, he said, noting that he supports expanded gambling.

“But we’ll fight those battles and find another source,” he said. “I’m listening to the business community.”

Rausch said he is tying the initial increase to the rate of inflation during the past 10 years rather than “pull a number out of the sky.”

“This to me is starting a process and if it makes it easier for everybody to look at it on a one-time basis, then I’m in favor of that,” he said.

Rausch’s proposed change was backed by two key cosponsors.

Sen. David Boutin, R-Hooksett, said, he understood Rausch’s initial effort to avoid constant legislative battles over gas tax hikes.

“But the argument against it was that you are binding the next Legislature or you’re not giving them opportunity to vote on it,” he said, “and I’m perfectly content to allow that process to take place.”

Prior to Rausch’s confirmation of his move, Sen. Lou D’Allesandro, D-Manchester, vice chairman of the Ways and Means Committee, said that “indexing is a problem, and I think that (Rausch) is going to have to deal with that.

“Many have expressed concern about that,” D’Allesandro said.

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