House votes to raise NH gas, diesel tax 12 cents

CONCORD, N.H. (AP) -- New Hampshire's House voted Wednesday to phase in a 12-cent hike in the gas and diesel tax to fix deteriorating roads and bridges, setting the stage for a budget battle with the Senate, which proposes instead to legalize a casino to pay for infrastructure improvements.

The 206-158 vote sent the proposed increase to the Senate, which voted earlier this month to legalize 5,000 video slot machines and 150 table games in one casino. The House voted last week to kill one casino bill, but kept a second bill alive to preserve its ability to offer its own gambling bill even though the House has never passed one.

But whether drivers or gamblers pay to fix New Hampshire's deteriorating highways isn't likely to be decided until the budget is acted on in June.

New Hampshire has not raised its 18-cent tax in 22 years and supporters say more money is needed to finish expanding Interstate 93 from the Massachusetts border to Manchester and for other highway improvements. The bill calls for increasing the tax on gas over three years and on diesel over six years.

House Public Works and Highways Chairman David Campbell, a Democrat, who has the support of many Republicans on his committee, sponsored the bill that would raise about $817 million over 10 years. Once fully phased in, the tax would produce about $91 million annually. The bill would fully fund the $250 million needed to finish widening I-93.

Campbell says nearly two dozen bridges have been closed over the past two years and more will be closed without additional funding. He also argues the tax increase won't be reflected penny-for-penny in gas prices. New Hampshire's tax rate is the lowest in New England, yet gas can be found cheaper in nearby states, he says.

Opponents argued consumers recovering from the recession can't afford higher taxes.

Former House Speaker William O'Brien, a Republican from Mont Vernon, tried unsuccessfully to get the House to stop diverting money raised from gas taxes to support spending in agencies other than the Transportation Department. His proposal would have cut the Department of Safety's budget by more than 40 percent, as well as cut small allocations to the Justice Department, Health and Human Services Department, highway safety agency and the courts.

"The choice is to use the money already set aside to repair our roads and bridges and to stop diverting funds away and fund that diversion with a tax increase," said O'Brien.

O'Brien argues state troopers funded now with gas taxes should have to compete for funding from other state taxes.

"Bottom line: This gas tax is a war on poor people," said state Rep. John Burt, R-Goffstown.

But state Rep. Harry Young argued the tax is needed to fix roads that are is such poor shape they are damaging vehicle suspensions, throwing off wheel alignments and causing unnecessary tire wear.

"They are suffering. It is not because of the tax; it is because of what it costs to fix their cars," said Young, D-Jaffrey.

State Rep. Andy Renzullo, a Hudson Republican, said voters will throw out lawmakers who vote for the tax increase.

"A tax that saves you money — I don't believe it. Do you really believe it?" he said in response to Young's argument.

But Campbell said voters want lawmakers to work together to solve problems and especially to fix roads and bridges that are key to the state's economy.

"When the roof leaks in your home, you do not ignore it, you fix it," he said. "The political consequences to those who ignore the state's problems will be greater than to those working cooperatively to fix them."

Campbell, of Nashua, argues legalizing one casino to compete with three proposed resort casinos in Massachusetts and a slots parlor won't raise enough money and, unlike the gas tax, is not constitutionally earmarked for highways.

Gas tax supporters, gambling supporters and Gov. Maggie Hassan agree on one thing: Something needs to be done to better fund highways. More than 350 municipal bridges are on the state's red list — those most in need of repair. Another 140 bridges owned by the state are on the list.

The roughly 1,600 miles of state roads in poor condition would stretch from Concord to Fargo, N.D. The almost 1,900 miles in fair condition would continue on from Fargo to Lake Watson in the Yukon. And the 800 miles in good condition — mostly the interstate and turnpike system that benefited from federal stimulus funding improvements — would run the rest of the way from Lake Watson to Anchorage, Alaska.