By Sarah Downey | The Center Square
As New Hampshire faces declining highway funds stemming from a decrease in gas tax revenue, lawmakers have been considering higher vehicle registration fees to offset the losses.
Rep. Norman Major, R-Plaistow, has proposed higher fees for vehicles deemed fuel efficient, stating that car owners using less gas still need to contribute to highway funding.
“If we don’t maintain the roads, what’s going to happen to our economy?” Major said in a story posted on New Hampshire Public Radio. “There’s not a business or anything else that doesn’t depend on our roads and bridges.”
A bill from Rep. Peter Somssich, D-Portsmouth, takes a different approach to registration fees, and instead would calculate a combination of a vehicle’s gross weight and its annual travel mileage.
In an email response to The Center Square, AnnMarie French, executive director of the New Hampshire Fiscal Policy Institute, provided insights on the impact on drivers.
“Despite one rate increase in 2015, motor fuels taxes in New Hampshire bring in less revenue than they did in the early 2000s, after adjusting for inflation,” French said. “Between 2000 and 2019, New Hampshire’s population grew by an estimated 124,000 people. With limited resources to keep roads in good condition, road quality degrades. Travel on poorly maintained roads can increase resident costs for vehicle repair, which can be particularly challenging for residents in rural areas and for those on limited incomes.”
French said that gas taxes generally take into account miles traveled and vehicle fuel efficiency.
“To the extent that heavier vehicles use more gasoline, taxing gasoline has a connection to the relative wear-and-tear on the roads,” she said. “Recent increases in fuel efficiency and a slowdown in growth of the total number of vehicle miles traveled in the United States relative to before the Recession has limited the growth of gasoline tax revenues. Motor fuels revenues in New Hampshire are not adjusted for inflation, which means that without changing the tax rate, the ability of the State and local governments to fix roads per gallon of fuel purchased declines over time.”
Another problem is that lower-income people tend to have less fuel efficient vehicles and wind up shouldering more of the fuel tax burden, French said.
“The State already levies registration fees on vehicles in New Hampshire,” she said. “‘Focusing changes to those fees on the weight of the vehicles being registered would reflect some of the costs stemming from driving heavier vehicles on roadways, and minimizing impacts on people with very limited incomes would likely help facilitate their ability to afford the other costs associated with transportation and engage fully in the economy.”
Meanwhile, the state Department of Transportation is scheduled to issue a new report on the highway fund and gas tax revenues later this month.