New Hampshire lawmakers eye registration rebates to offset gas prices

By Christian Wade | The Center Square

New Hampshire lawmakers want to give the state’s motorists a little relief from skyrocketing gas prices by providing them with rebates on vehicle registrations.

A new proposal introduced to the House Finance Committee on Monday, with support from House Speaker Sherman Packard, R-Londonderry, would send the owners of vehicles registered between July 2021 and June 2022 a one-time $25 rebate.

Backers of the proposal couched it as an alternative to suspending the state’s 23.8-cent gas tax, which has been floated by lawmakers and third-term Republican Gov. Chris Sununu to help offset the impact of record high inflation and higher prices at the pumps following Russia’s invasion of Ukraine.

Rep. Karen Umberger, R-Conway, the proposal’s primary sponsor, said lawmakers looked at suspending the gas tax for three months but determined that it would require nearly 100 additional state workers to manage the gas tax rebates while only saving motorists about $10 over the three-month period.

“We felt that with all of the administrative costs and the amount of the gas tax rebate that probably was not the most efficient use of the money,” she told the committee. “We believe this is the best way to provide relief, and we also knew that by doing this the only people who would receive the rebate will be New Hampshire residents.”

The proposed rebates would cost the state about $40 million, Umberger said, based on the estimated 1.6 million active vehicle registrations. Money for the refunds would come from the state’s general fund, she said.

The proposal was tacked onto an unrelated bill before the committee, which calls for expanding regional career technical agreements to expand the state’s blue-collar workforce.

A perfect storm of supply chain disruptions, high inflation and Russia’s invasion of Ukraine have sent gasoline prices soaring to record levels, fueling calls for state leaders to help soften the financial hit to motorists and businesses.

Gas prices in New Hampshire were averaging about $4.24 per gallon this week, according to the American Automobile Association of the Northeast.

Overall, New Hampshire drivers pay a total of 42.23 cents per gallon in gasoline taxes, including state and federal taxes and other fees, according to the American Petroleum Institute.

The state’s highway fund, which includes gas tax and toll road revenue, generates about $165 million a year, according to the Department of Transportation. The money goes toward fixing roads and bridges, and other projects.

The revenue is also used as collateral to repay transportation bonds, and economists have warned that suspending that source of revenue could impact New Hampshire’s bond rating.

Sununu has also called for suspending the Granite State’s 8.3% levy on restaurant meals and hotel rooms to provide relief for inflation-wary residents.

But Umberger told the committee that suspending the meals and lodging tax would compromise the state’s ability to repay $700,000 per month in outstanding bond obligations. She said lawmakers ultimately determined that the vehicle registration rebates were the best approach to helping ease pain at the pumps without compromising the state’s financial position.

“This is one of the areas we felt we could manage without additional costs, while providing some gas tax relief for residents,” she told the committee on Monday.

If the finance committee recommends approval of the measure, it must still go before the full House and Senate before landing on Sununu’s desk for consideration.

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