The good news coming from a legislative hearing this week on funding for New Hampshire roads and bridges is that there was general agreement that more revenue must be found if the backlog of sorely needed infrastructure projects around the state is to be addressed. How to find that funding while addressing slowing gasoline tax receipts, however, provoked very different proposals that are at odds with each other.
New Hampshire has long relied on gasoline taxes to support the state Highway Trust Fund that pays the state’s portion of projects. The concern is that the trust fund’s gas-tax revenue stream is being challenged as vehicles become more fuel-efficient and gas consumption declines, and InDepthNH.org reported that state transportation officials estimate revenues could be down by 10-15 percent in 10 years.
One proposal aired at the hearing, whose lead sponsor is Rep. Norman Major, R-Plaistow, would seek to buttress trust fund revenues by collecting an additional user fee at the time of vehicle registration that would vary depending on the fuel efficiency of the vehicle being registered. Under this proposal, the greater the fuel efficiency of the vehicle, the higher the fee. Major’s reasoning is that owners of fuel-efficient vehicles are not paying their fair share toward the Highway Fund because their lower gasoline usage results in lower tax receipts collected at the pump.
An alternative approach, proposed by Rep. Peter Somssich, D-Portsmouth, and others, would change the registration fee calculation based on vehicle weight and miles traveled. Because fuel-efficient cars tend to be lighter in weight, fees under his proposal would be higher for lower-efficiency vehicles. The argument for Somssich’s approach is that wear-and-tear on the highway system is better measured by vehicle weight and mileage and that raising revenue based on those factors would encourage adoption of fuel-efficient vehicles.
Both proposals would add sorely needed revenue to the Highway Fund, but both present meaningful concerns. Major’s bill would tend to discourage residents from investing in vehicles having greater fuel efficiency, the last thing government should be doing when a goal should be to reduce carbon emissions and reliance on fossil fuels. That this proposal comes at a time when Gov. Chris Sununu has chosen to have the state go it alone and not join other New England states in a regional transportation initiative to drive down carbon emissions being led by Massachusetts Gov. Charlie Baker makes Major’s approach even more unwise.
Somssich’s proposal, while theoretically sounder in basing fees on actual road use and more desirable from a policy standpoint in incentivizing fuel efficiency, suffers from a devil’s-in-the-details problem. Among the concerns cited at the hearing were the complications of implementing changes to the vehicle registration and inspection process. Also, the fee under his bill would be based on total mileage, and not just miles driven on New Hampshire roads, which would be unfair to those who regularly drive on other states’ roads.
Further, both proposals share a significant shortcoming as a user fee, because both fail to make out-of-state vehicles — a meaningful source of road wear-and-tear — contribute equitably toward the Highway Fund.
We certainly applaud the goal of increasing revenue for the Highway Fund. And we endorse any initiative that would promote greater use of fuel-efficient vehicles. The Somssich approach is the more sensible, but its shortcomings must first be addressed. In the meantime, the need for additional revenue for the Highway Fund remains pressing.
One alternative suggested at the hearing was to raise the gas tax and also begin implementing a fee on the use of electric vehicle charging stations in the state. Given the infrastructure project backlog, this is a step worth taking. New Hampshire’s gas tax is easily the lowest in New England and will likely be even comparatively lower if Baker’s initiative is adopted in Massachusetts and elsewhere in the region. If New Hampshire is intent on continuing to rely on a user-fee approach to maintaining the highways and bridges, that’s a good first step to shoring up the Highway Fund.