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Senate Finance Committee backs gas tax hike

State House Bureau

March 20. 2014 9:27PM

CONCORD — The Senate Finance Committee voted 4-2 Thursday to recommend the Senate approve a 4.2 cent-a-gallon hike in the state’s 18 cents-a-gallon gasoline tax.

The vote comes with an agreement to use the more than $32 million in estimated additional annual revenue to repay bonds to complete the Interstate 93 expansion project from Salem to Manchester and to fix the state’s road and bridges.

Under SB 367, the increase would be repealed after $200 million in bonds – $100 million a year issued in fiscal 2016 are 2017 are paid off over 16 to 20 years.

The agreement would allow the state to secure about $80 million in Grant Anticipation Revenue Vehicle, or GARVEE, bonds or bonds to replace the Sarah Mildred Long Bridge in Portsmouth, and would use $40 million in federal funds earmarked for that project to help pay for the I-93 expansion.

The agreement would also eliminate the Exit 12 tolls on the F.E. Everett Turnpike in Merrimack.

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 NH Department of Transportation. Over the next 20 years, the increase would be expected to raise $588 million, with $70 million of that going to cities and towns as block grants, according to figures from the Legislative Budget Assistant’s Office.

About half of the remaining money would pay for the I-93 expansion bonds beginning in fiscal 2017 and $124 million would go to fix municipal bridges.

Committee members voting for the gas tax increase proposal were Sens. Peter Bragdon, R-Milford; Bob Odell, R-Lempster; Lou D’Allesandro, D-Manchester, and Sylvia Larsen, D-Concord.

Voting against the plan were Senate President Chuck Morse, R-Salem, and committee Chair Jeanie Forrester, R-Meredith.

The Senate previously voted 14-9 to preliminarily approve the bill, which was sent to the Senate Finance Committee for review.

“It has been a long, bumpy road filled with potholes to get to this point,” said the bill’s prime sponsor, Sen. Jim Rausch, R-Derry, when the bill was before the Senate, noting that the state’s gasoline tax has remained unchanged for the past 23 years.

Rausch has said if an individual drives 10,000 miles a year in a vehicle that averages 25 miles per gallon, they will spend $16 more a year.

Senate Bill 367 calls for the one-time increase to take effect July 1.

An earlier provision would had kept the initial increase in place for four years and then would have increased the tax every four years beginning July 1, 2018, through a formula related to the consumer price index.

The provision was removed at Rausch’s request.

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