CONCORD, New Hampshire — A Derry Republican is proposing using an inflation formula to increase New Hampshire's gas and diesel tax about 4 cents next July.
State Sen. Jim Rausch said Thursday that his bill would begin restoring purchasing power to the Department of Transportation. New Hampshire's 18-cent tax is used to maintain highways and bridges, but has not been increased since 1991.
Earlier this year, efforts to raise revenue to finish widening Interstate 93 and make other needed highway and bridge improvements failed over a disagreement on how to raise money. The Senate proposed legalizing a casino, which the House rejected; the House proposed phasing in a 12-cent increase in the gas and diesel tax, which the Senate rejected.
"I'm doing this because I feel I have an obligation to solve a problem," said Rausch.
Rausch said the price of a gallon of gasoline was $1.14 in 1991, which meant 18 cents was roughly 16 percent of the price. He said a gallon costs about $3.20 now and 18 cents is only 5.6 percent of the amount applied to road improvements.
"If we use highways, we have an obligation to make sure they are up to date and in good condition," he said.
Rausch proposes using the Consumer Price Index in a formula to set the tax going forward. His first calculation would be based on the difference in CPI from 2003 to 2013. Later increases would be every four years and Rausch estimated they would average a penny.
Each penny raises about $7 million a year. Rausch would earmark proceeds above 18 cents to the Department of Transportation, not to a specific road project.
Rausch, a co-sponsor of the defeated casino bill, said a casino is also needed to provide more revenue for highways than his bill proposes.