- Associated Press - Thursday, March 27, 2014

CONCORD, N.H. (AP) - As a compromise to last year’s differences over highway funding, New Hampshire’s Senate voted Thursday to temporarily raise the tax on gas and diesel 4 cents in a deal to finish the expansion of Interstate 93.

The Senate voted 15-9 to send the tax-hike bill to the House. The measure would provide more money over the next two years for highway improvements, then take some of the tax proceeds to pay off $200 million in borrowing toward completion of the I-93 project.

Once the debt is paid off, the tax hike would expire. The House passed a 10-year highway plan Tuesday that outlines a way to help pay for the I-93 project and proposes borrowing money to replace the Sarah Mildred Long Bridge between Portsmouth and Kittery, Maine. The bill approved by the Senate would also eliminate the Exit 12 ramp toll booths in Merrimack.

Senate Transportation Chairman Jim Rausch, the bill’s sponsor, had taken it upon himself to push for raising money for road improvements after the Senate soundly defeated a House bill to phase in a 12-cent increase in the tax last year. The Senate took that action after the House rejected a Senate casino gambling bill that earmarked some of the state’s profits to highway improvements.

“I ran into a pot hole, blew out a tire and wasn’t sure how we’d proceed,” Rausch said of his effort to find a compromise.

If approved by the House and signed into law, the state’s 18-cent tax would rise about 4 cents per gallon in July. The tax has not been increased since 1991 and is the lowest in New England. The increase is projected to raise $32 million annually, which would be dedicated to highway improvements the first two years. After that, about half the revenue from the tax increase would go to pay off borrowed funds needed to finish the interstate expansion. The bonds to fund the construction are expected to be paid off in about 20 years.

Gov. Maggie Hassan has said if a consensus is reached on a tax increase, she will sign the legislation.

The New Hampshire Motor Transport Association opposes the tax hike, saying it would hurt the trucking industry.

Rausch, a Derry Republican, has said if the trucking industry fails to support his proposed increase, he will work to reduce the amount of cargo they can haul on New Hampshire highways because lowering the weights trucks can carry would cause less damage to highways.

Sen. David Pierce, D-Hanover, said studies show that the tax increase won’t be reflected penny-for-penny at the gas pump. He said price volatility at the pump is largely due to fluctuations in the price of crude oil.

Rausch said lawmakers still must address a looming shortfall in the Department of Transportation’s operating budget which - if not addressed in the next budget - could result in hundreds of layoffs. Rausch said the shortfall will be addressed in the two-year budget for the years starting July 1, 2015. That budget will be written next year.

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