Lawmakers Propose Dueling Road Usage Fees to Offset Declining Gas Tax Revenue

Jan 21, 2020

Credit NHPR Staff

Lawmakers on Tuesday heard two opposing plans for bolstering state highway revenues, in response to a decline in gas tax revenue and road maintenance funding as vehicles get more efficient or go electric.

The two bills propose new systems for vehicle registration fees in New Hampshire.

One would impose higher fees on more fuel efficient vehicles. Its sponsor, Republican Rep. Norman Major of Plaistow, says vehicles that use less gas and generate less gas tax revenue need to pay into the highway fund another way.

“If we don’t maintain the roads, what’s going to happen to our economy?” Major says. “There’s not a business or anything else that doesn’t depend on our roads and bridges.”

Democratic Rep. Peter Somssich of Portsmouth has an alternate plan. It would redo how registration fees are calculated to include a combination of a vehicle's gross weight and how many miles it travels per year.

Somssich says his bill would raise more money than Major’s bill. Some revenue from the Democrat’s plan would be earmarked for long-overdue highway sound wall installation on the Seacoast.

Some who testified said Somssich's bill would be too complicated to implement, requiring changes to the systems for state inspections and local registration fee collection. 

But Somssich argues that Major’s plan would disincentive low-emission vehicle adoption, encouraging people to drive inefficient, air-polluting cars.

Somssich likened this to the state encouraging people who don’t spend as much on taxable liquor, cigarettes and lottery tickets to buy more in order to pay their "fair share.”

"We should not do that, because these habits are not good ones to encourage,” he says.

Most who testified on the bills agreed that the highway fund needs to become less reliant on gas taxes, as fuel efficiency continues to improve and as auto-makers sell more electric and hybrid vehicles.

But stakeholders had other concerns about both the Republican and Democratic proposals. 

Most who testified on the bills agreed that the highway fund needs to become less reliant on gas taxes.

Some noted that neither bill accounts for the effect that out-of-state cars have on New Hampshire’s roads. 

New Hampshire Timberland Owners Association executive director Jasen Stock noted that heavy-duty trucks will accrue many miles on private roads -- contributing to their fee without damaging public roads. 

Stock said Somssich's bill could encourage truck drivers to register out of state to save money. Somssich says this is a risk under the current gas tax system, too - and that the current system doesn't account for out-of-state drivers, either.

Still others who testified said the state should just raise the gas tax across the board, and consider a separate fee on electric vehicle charger use to shore up the highway fund.

The state Department of Transportation is due to release a grant-funded report on the state of the highway fund and gas tax revenues in the next month or so. 

Officials gave a preview at the committee hearing Tuesday. They said the highway fund will still have a surplus at the end of the current budget cycle, but that surplus is shrinking.

The Department of Transportation worked with UNH to poll residents for the report. Officials say most agreed that the state needs more highway revenue. But no solution for generating that revenue got a majority of residents’ support.