As sure as the arrival of spring after a long winter, the New Hampshire legislature is once again debating an increase in the state’s Gas Tax. Each year, our friends on the political left in the State House and the State Senate explain the need for “additional revenue” (liberal code for more taxes and higher fees) through a hike in the Gas Tax to maintain our infrastructure. Typically, cooler heads prevail and the New Hampshire taxpayer is spared yet another plea to take more of their hard-earned money. However, this year the situation is much different due to the fact that the individual currently occupying Concord’s corner office, Governor Maggie Hassan, has embraced the notion of raising the Gas Tax, much to the chagrin of New Hampshire families.
An increase in the Gas Tax, currently known as Senate Bill 367, proposes to increase the tax Granite Staters pay for fuel to 22.2 cents per gallon – that’s a 23% increase that New Hampshire families would feel as early as July 1, 2014.
Like years prior, proponents of raising the Gas Tax have cited the need for “more revenue” in order to maintain our current highway system. They also stress that the increase would be “minimal” for New Hampshire consumers.
The organization I represent, Citizens for a Strong New Hampshire, as well as many others, have strongly opposed Senate Bill 367 from its inception. While we certainly support maintaining our state’s roads and bridges, we recognize that the impact Granite Staters will feel from the passage of this bill isn’t as minimal as its supporters claim. Let me explain.
For example, Senator Jim Rausch of Derry has repeated several times in his testimony to committees in both the State Senate and the State House that a driver who travels 10,000 miles a year in a vehicle that gets 25 miles per gallon would only see an increase of $16 per year. However, even just the assumption that the average driver only drives 10,000 miles is completely unrealistic. In fact, this number is especially improbable for commuters who live in Senator Rausch’s own district, as many of them commute to Massachusetts for work at least five days a week.
Let’s dive into Senator Rausch’s numbers even further. Saying an individual drives 10,000 miles a year would actually mean that he or she would only drive 27 miles a day or 192 miles per week. Honestly, I can’t remember the last time I only drove 192 miles in a week and I’m not alone. The Federal Highway Safety Administration actually estimates that the average driver between the ages of 20 and 54 is more likely to drive 13,000 to 15,000 miles annually, consuming between 520 and 600 gallons of gasoline per year. With that more realistic estimate, if Senate Bill 367 passes, these consumers would pay between $114 and $132 in Gas Taxes annually. Remember, that’s just a home with a single driver. This number would have to be doubled for households who have two drivers and tripled (or more) for those with children at driving age. In those homes, that’s a hefty tax burden.
Let’s have an even deeper discussion about the direct impact a consumer will feel at their local gas station. While daunting, the figures above still doesn’t accurately portray the impact Granite State families will feel from a hike in the Gas Tax. To get the full scope, we must consider the impact the tax increase will have on businesses that utilize commercial vehicles. That includes everything from food delivery vans to your neighborhood snowplow trucks.
As you would expect, a driver in the trucking industry travels significantly more than 15,000 miles per year and gets considerably less than 25 miles per gallon. That means that increasing the Gas Tax will have even a much higher, but numerically incalculable, impact on every business’ bottom-line. Thus, it certainly doesn’t take an economics professor to recognize that in addition to the direct cost consumers would have to pay for their own fuel consumption, Granite State families will also have to foot the bill for the increased cost passed onto them through higher prices for goods and services.
Remember, as I said earlier, Citizens for a Strong New Hampshire isn’t opposed to ensuring resources are utilized to keep our state’s public infrastructure safe and operable – but instead of coming back to the taxpayers for “more revenue,” the state needs to reassess how it uses its current revenue. The New Hampshire Constitution states that highway funds are supposed to only be used for construction, maintenance, and the supervision of traffic. However, that certainly is not been the case. For years, funds that should be used for infrastructure have been diverted to fund the Department of Safety and other state programs. To remedy this, in 2008, a law was passed to stop the diversion of these funds. It required that a minimum of 73% of highway funds go directly to the Department of Transportation, 26% to the Department of Safety, and 1% for “other uses.” However, that law has been suspended for the past two budget cycles. Currently, only 12 cents of the current 18 cent Gas Tax is used to maintain our highways and roads with the other 6 cents being diverted to “other areas.”
With numbers like these, our organization believes that before we discuss raising the Gas Tax, our legislators need to adhere to current law and recommit existing revenues to maintaining our roads and bridges rather than just coming back to taxpayers for more money.
Day in and day out, our organization hears from Granite Staters who are struggling to find good jobs. Many of those who are employed still find it difficult to make ends meet. The last thing New Hampshire families need is another tax increase to take more money out of their paychecks. Our legislators in Concord have a responsibility to explore all options before considering a tax increase on their constituents. Instead of passing Senate Bill 367, they need to take a hard look at where current revenue is being spent and actually make the tough decisions to cut when necessary and fund our priorities. That’s exactly what New Hampshire families do every day. Shouldn’t Governor Hassan and our legislators be expected do the same?
Matthew Murphy is the Executive Director of Citizens for a Strong New Hampshire a non-partisan, non-profit organization committed to the principles of limited government, lower spending, and economic prosperity in New Hampshire.