Can NH’s antiquated revenue system be fixed in midst of political season?

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The political season is heating up with another Democratic gubernatorial candidate throwing his hat in the ring, Executive Councilor Andru Volinsky, who was the lead attorney in the Claremont education funding lawsuit.

Volinsky did not take the Pledge as the other announced Democratic gubernatorial candidate — Senate Majority Leader Dan Feltes — did.

The Pledge seeks to prevent broad-based taxes on income and sales, but there are many more tax issues the state needs to grapple with in order to maintain essential services.

Highway Fund

For example, the gas tax, which is one of the primary sources of money for the state’s Highway Fund. The fund not only pays for the state’s and some of municipalities’ highways and bridges but also for State Police, attorneys and various other expenses that may have something — however slight — to do with the state’s roadway transportation system.

The state raised the gas tax from 18 cents to 22.2 cents a gallon July 1, 2014, the first increase since 1991.

While more than 40 percent of the additional money was earmarked for finishing the I-93 widening project from Salem to Manchester, it allowed the state to use more federal money for state and local road projects.

But more was obviously needed for the state Transportation Department to make up for years of neglect.

Even with the 2014 gas tax hike, the Highway Fund collected less money during the last fiscal year, 2019, than it did in fiscal year 2008. Last year the fund collected $226.4 million, and $249 million in 2008.

The rate of inflation is about 20 percent between 2008 and 2019, according to federal government statistics, which means the state would be able to do 20 percent less work than it would have in 2008 if it had raised the same amount of money, but it raised less so the reduction is even larger.

You might ask why the revenues did not keep pace with inflation and should have increased with the 2014 tax hike.

Revenue decreased because of greater fuel efficiency and the move to hybrid and all electric-powered vehicles. Highway officials have been sounding the alarm for years.

With greater mileage or electric power, the amount of gasoline sold has declined although there are more and more people traveling the highways.

The problem has become so severe that the budget Gov. Chris Sununu proposed in February based on revenue from the Highway Fund would have resulted in major layoffs in Transportation and a significant reduction in maintenance projects.

Lawmakers switched some of Transportation’s funding to the general fund to avoid the layoffs and maintain the current rehab schedule for highway and bridges.

Some lawmakers have tried to address the problem for several years, most notably Rep. Norm Majors, R-Plaistow, who presented several proposals to increase funding through usage fees.

His latest attempt, House Bill 476, was retained by the House Public Works Committee, which will vote Wednesday on the bill and the full House will vote in January.

Major has bipartisan support for his bill, which would link vehicle models to federal gas mileage data and access fees based on how fuel-efficient they are. The baseline would be vehicles that get 20 miles per gallon and travel an average 10,000 miles a year. Cars that have higher mileage would pay the fee.

Opposition to road usage fees has come from many sectors including environmentalists and hybrid and electric vehicle owners who claim they are being punished for doing “the right thing.”
Yes, they are doing the right thing for the environment, but not for paying their fair share to maintain the state and local vehicle transportation system.

And that’s the dilemma lawmakers on the House Public Works Committee face Wednesday and House members will face in January.

Driving around the state on both state and local roads is an adventure: some roads nicely paved with rehabbed bridges while others damage your springs and shock absorbers.

If there is a better solution than what Major has proposed for the last six or seven years, no one has stepped forward to present their plan.

The only other alternative you hear is to limit which agencies use Highway Fund money to cover expenses. That has also failed to make it through the General Court because agencies fight to retain their share of the pie.

Doing nothing is never a good solution particularly in this state so dependent on tourism to help pay for its operation.

Fish and Game

The Fish and Game Department is in a similar revenue predicament.

Instead of greater fuel-efficient snowmobiles or off-road vehicles, the problem at Fish and Game is fewer and fewer people hunt and fish, which require licenses. The license revenue funds the agency.

Like Transportation, lawmakers have known for a while there is a revenue problem at Fish and Game and have chipped in some general fund money in the last few budgets to keep the department from slipping into deficit.

Revenues during the last decade have been flat, resulting in the agency putting off facility maintenance.

While the agency is responsible for managing the state’s wildlife and fish, it also has other responsibilities including rescuing lost or injured hikers.

Rescues were made more expensive several years ago, when the National Guard began charging for helicopter use that was once free. The rescues were treated as training exercises by the National Guard, but folks in Washington said the local guard offices had to charge the state or more specifically Fish and Game.

The rescues are expensive and for years the agency had no way to recoup any of the cost. So, lawmakers decided careless hikers could be charged and several years ago a “Hike Safe” card was instituted allowing hikers and other recreational users to purchase the card and not be liable for rescue costs if they need help.

Neither approach has generated enough money to cover expenses so the money from hunting and fishing licenses is being used to cover a good part of the rescue costs, making hunters and fishermen and women justifiably unhappy.

Five or six years ago a commission tried to determine how best to pay for rescues and proposed a canoe or kayak tax.

That proposal drew fire from many sides and a bill was never introduced although the proposal has resurfaced several times since then including this year when Rep. Jeff Goley, D-Manchester, proposed a $10 tax on canoe and kayak owners who use public boat launches. Those using only private launches would not have to pay the tax.

House Bill 640 was retained by the House Fish and Game and Marine Resources Committee and next week the committee will decide what to do with the proposal.

Neither the road usage fee nor the canoe and kayak tax is an ideal solution to the problems the two agencies have with their revenue streams.

But it is a fairness issue for those who use the highway system and who hunt and fish.

An income tax and sales tax may receive most of the focus in political discussions along with the state’s over-reliance on property taxes to support government services, but the Highway Fund and Fish and Game Fund shortfalls show the state’s tax system has other fairness issues as well.

The Pledge does not address the inequities in paying for the highway system and managing the state’s wildlife and aquatic resources.

The state’s antiquated revenue system has issues beyond the most obvious of property and business taxes, but the political will to make any changes has been extremely slow to materialize outside of cutting business tax rates.

Garry Rayno may be reached at

About this Author


Garry Rayno


Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries.