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New Hampshire motorists decry hike in fuel tax

New Hampshire Union Leader

June 28. 2014 5:59PM

Motorists hitting the road this week for the long Independence Day weekend can expect to pay more at the pump because New Hampshire's higher gas tax takes effect Tuesday.

The increase - the first since 1991 - hikes the state's fuel tax rate by 4.2 cents, to 22.2 cents a gallon. The tax is forecast by state economists to raise an estimated $32 million annually - about $588 million over 20 years - for transportation work. But Granite Staters prepping to head out on the highways say the hike couldn't come at a worse time.

"I didn't want it when it was passed, and I don't want it now," Gary Reitchek of Candia said as he filled his vehicle Friday at the Kwik Stop Mobil Station on Hanover Street in Manchester. "I know it will pay for work on the roads, but the timing, right before the holiday weekend, is tough."

"I know it's only like 4 more cents a gallon, but I doubt you'll find anyone here that's excited about paying more," said Eileen Gleason of Hooksett, gesturing toward several other cars parked at Kwik Stop pumps.

According to the federal Energy Information Administration, as of Friday, the national average for a gallon of regular gasoline reached $3.70. The average in New Hampshire was $3.65 a gallon - 19 cents higher than a year ago at this time.

Gas prices in the Granite State have risen 4.1 cents a gallon in the last month, even without the higher gas tax.

On Friday, the website listed the highest reported price for regular unleaded in the state as $3.95 a gallon at the Irving station on Whitefield Road in Twin Mountain. The lowest, according to the website, was $3.41 a gallon at the Tony the Tiger station on Webster Street in Manchester.

Managers at two Manchester gas stations - the Kwik Stop on Hanover Street and a Mobil on Brown Avenue - said Friday it was too early to guess what the prices would be on Tuesday because of the number of factors involved, including supply and demand, instability in foreign countries, and weather conditions affecting domestic production operations.

"I think you always pay more in the summer anyway, but now throw on the tax," said Bob Halsey of Manchester. "I'm afraid where it'll be by August."

The summer season accounts for 40 percent of tourist visits and spending in New Hampshire.

"The Fourth of July is our most popular holiday and helps kick off the busiest part of the summer season in New Hampshire," said Lori Harnois, director of the New Hampshire Division of Travel and Tourism. The state estimates over 860,000 visitors will head to the Granite State for the holiday weekend, spending $128 million while here.

According to a report by the Institute for New Hampshire Studies, the state will welcome about 14.9 million visitors from other states during the summer months, about 2 percent higher than the number last year. These visitors are expected to spend about $1.95 billion, up 2.5 percent over last summer.

The report estimates that most of the visitors for the summer season will be from New England, the mid-Atlantic states, and eastern Canada - and will be traveling by car.

"This is very frustrating for the very many people driving on summer road trips," said Patrick Moody, spokesman for the American Automobile Association Northern New England. "AAA expects the majority of U.S. drivers likely will pay the highest gas prices for Independence Day since 2008. Today's national average price of gas is about 20 cents per gallon more expensive than the average on July 4, 2013, which was $3.48 per gallon. In recent years, gas prices have declined in the weeks leading up to Independence Day, but this has not occurred this summer due to high crude oil costs resulting from violence in Iraq."

AAA had predicted a drop of 10 to 15 cents a gallon at the pump this month.

Moody would not speculate whether the higher gas tax specifically would result in fewer cars on the road next weekend, but said higher prices at the pump could affect the amount of money travelers spend here.

"AAA does not believe that high gas prices will have a significant impact on the number of people traveling, but it could result in some consumers cutting back on dining, shopping or other trip activities," said Moody.

The new tax will provide increased funding to fix and maintain state and local highways and bridges for the next two years. After that, about half of the proceeds generated will be used to pay off $200 million in borrowing to widen the Interstate 93 corridor from the state line in Salem to Manchester. The New Hampshire Department of Transportation is also authorized to eliminate toll collection at Exit 12 on the Everett Turnpike in Merrimack, estimated to cost the state $600,000.

In a statement released after she signed the gas tax hike into law on May 20, Gov. Maggie Hassan said, "Our bipartisan transportation funding bill is the most significant state-level investment in transportation infrastructure in 23 years. This legislation is an important step toward addressing our transportation needs, keeping New Hampshire's economy moving forward by advancing critical road and bridge projects, finishing the long-overdue expansion of I-93 and improving commutes for our workers and visitors."

Even after the hike takes effect Tuesday, New Hampshire's gas tax rate will retain its title as the lowest in New England, just below Massachusetts' 24 cents a gallon.

The tax increase is scheduled to be repealed once the bonds for the I-93 project are paid off - an estimated 20 years from now.

The New Hampshire Motor Transport Association opposed the tax hike, projecting it would cost truckers $750 more in annual expenses. Association President Bob Sculley instead encouraged lawmakers to better prioritize use of existing revenues.

Taxpayer groups in the state remain opposed to the tax.

"As the summer driving season drives up the cost of gas and diesel, this couldn't have come at a worse time," Greg Moore, Americans For Prosperity-New Hampshire state director, said in a statement.

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