« Six Thumbs Up, Six Thumbs Down | Main | Sequester Is Not Enough »
Monday
Mar042013

Why I Can't Support Campbell's Gas Tax Hike

At the risk of tipping my hand early or even at the risk of winding up on the losing side (that is to say, the non-prevailing side), here's what I plan to say about David Campbell's nearly doubling of our state's gasoline tax when and if the bill comes to the floor this week.

        Thank you, Madame Speaker; I rise with a certain degree or sadness to speak against this nearly doubling of our state gasoline tax.

        I say with some degree of sadness because a few weeks ago I was prepared to vote for a modest increase in the gasoline tax.

        After all, this is not your normal tax; it can be said to represent a user fee in the truest sense of the term because the more you use our roads and bridges, the more you should pay to have them maintained and the more you do in fact pay because you must buy more gasoline.

        So yes indeed, I was prepared to accept a modest increase in this tax. However, there is nothing modest about this tax increase. 

        In fact, the increase from 18 cents a gallon to 33 cents represents a classic overreach; and overreach on steroids; a stunningly audacious overreach; an overreach run amok if you will.

        Just think, Madame Speaker, no matter how noble the goal—and roads and bridges improvements is a noble goal, make no mistake about that—no matter how noble the goal, this nearly doubling of the gasoline tax, up 83 percent for those who insist on placing an actual percentage to the number—this nearly doubling of the tax is beyond what we have ever done to any other tax…and I dare say, beyond what we ever would do.

        A few years ago, we agonized about a one penny increase in the rooms and meals tax, an increase from eight to nine cents.  Just think what the rooms and meals tax would be if we were to increase it 83 percent—even for a noble goal.  It would be a whopping 16 and a half percent, an increase I dare say none of us here could countenance.

        Earlier this year, this House overwhelming rejected a modest increase in the beer tax, but if we were to increase the beer tax 83 percent, the tax would not be 12 cents a gallon as it is now, but rather 22 cents a gallon.  Certainly no one—or I dare say very few—people here would countenance such an increase.

        Our state’s business profits tax is eight percent; an 83 percent increase would bring the level up to 14 and a half percent.  Simply unthinkable.

        Our state’s business enterprise tax is currently three quarters of one percent.  An 83 percent increase would bring it to a level of 1.4 percent and there would be no end of howling from the business community.

        A nearly doubling, an 83 percent increase in any tax, is or should be simply beyond the realm of consideration here.

        Currently the real estate transfer tax if $7.50 per thousand for both the buyer and the seller of a property.  An 83 percent increase in that tax would bring the level up to $13.72 per thousand for both the buyer and the seller.

        Unthinkable!

        I could go on and on, walking you through every tax we have, but let’s do just two more.  The communications tax is currently at 7 percent; an 83 percent increase would bring it up to nearly 13 percent. 

        The interest and dividends tax, which affects our senior citizens to a greater degree than others, would go from five percent to more than 9 percent were it to be increased 83 percent.

        We don’t have an income tax in New Hampshire, but if we did, would we ever consider raising it 83 percent at one time?

        Of course not.

        There would be open rebellion in the streets, we can only hope, if the Feds ever decided to raise the income tax 83 percent on all people.

        Keep those last three words in mind.

        On all people.

        This gasoline tax, unlike some taxes, is paid by everyone who fills up.  I can pay less by driving less, but if I’m a poor person going back and forth to work, there’s only so much less gas I need to put in my tank.  It’s not like the rooms and meals tax where I can choose to eat a one dollar McDouble rather than going for the expensive t-bone streak.  I can choose not to spend a weekend at an expensive resort hotel.

        Sure, our roads and bridges need attention Madame Speaker, but currently about one-third of the gasoline tax is diverted from highway improvement to fund such things as state police and administration.

        I want to be careful how I state that number, and so as not to get the number wrong, I asked LBAO to run a few calculations.  To show a trend, let’s begin with fiscal year 2012.  That year, 24.0 percent of highway monies went to the department of safety, mostly to state police.  For the current year, the percentage is 25.9.  Note the trend; that’s an additional 1.9 percent of gas tax money being siphoned away from road and bridge repair, but it gets worse. 

In the governor’s budget proposal for fiscal year 2014, the percentage is up to 28.0 and for the following year, it’s up to 28.3 percent. 

In other words, this bill asks for nearly a doubling of the gasoline tax so we can siphon off more and more revenue off (yes, the pun is fully intended—siphon off) for purposes other than road and bridge repair.  

        No, you just can’t make this stuff up Madame Speaker.

        Another 33.5 percent of highway funds goes toward operating expenses, but I’m told that some of that is used for debt service, some for workman’s comp, so it’s very difficult to get an exact number here.

        But we do know that less and less gasoline tax money is going for road and bridge repairs.

        That’s we what do know.  That’s an indisputable fact, one that should cause great concern for anyone who was thinking of voting for this bill.

        I’ll stick with my estimate that only two out of every three cents of your gasoline tax dollar goes to road and bridge repairs.

        As long as we drain a third of the gasoline tax for purposes other than fixing roads and bridges, we must not delude ourselves into thinking that there is any justification whatsoever in increasing this single tax 83 percent, a number so outlandishly high that we would never consider it an appropriate increase for any tax on our books.

        If this increase were to pass, New Hampshire would move from a state ranking of 41st of gas taxes to the top dozen or so, right up there with California and New York.

        Perhaps the silliest defense of this nearly doubling of the gas tax is that we need to do it because the gas tax hasn’t been increased since the early 1990s.  If you were to make that argument about raising any other tax…or creating an income or sales tax….you would be laughed at.  Double the rooms and meals tax or business taxes since it’s been a while since we’ve raised them?

        I think not!

        And lest you think that more money means our roads will be in pristine condition, consider this.  Many here, Madame Speaker, know that I am a frequent visitor to the province of Quebec.  Gas is sold by the liter there, but when you do the conversion, gas costs about a dollar per gallon more there.

       Why, you may ask.  Because the gas tax in Quebec is about $1.75 a gallon, nearly ten times what our tax is, and believe me the roads are not in ten times better shape.  In fact, they are among the worst roads you could ever imagine driving on—sorry Tourism Bureau of Quebec, but that’s the truth.

        Even a doubling of the gasoline tax will not guarantee our roads will be in tip top shape.  We need a smart plan; we need to use our gas tax dollars for road and bridge repairs, not to be siphoned off more and more for other purposes.  We do not need and cannot afford this 15 cent per gallon increase.

        All taxation hurts someone Madame Speaker; this gasoline tax increase will hurt everyone, but it will hurt those who can least afford it the most.  No, not 15 cents a gallon, Madame Speaker, especially not now.

   

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (3)

All good points. However, I don't understand why you think the Interest and Dividends Tax isn't an income tax. For many elders, after Social Security and perhaps a pension, it is a significant source of income. When the tax started, it exempted interest from NH and VT banks, encouraging deposits in those institutions. They must have had a great lobby. When it was determined that this was a restraint of trade, instead of giving up the small amount of revenue, the tax was expanded to its current level of $81MM. Now, it is hard to give up, and even those who sign pledges against an income tax ignore the fact that we HAVE an income tax in place.

User fees and the Road Toll (gas tax). Those who pay tolls, also pay the gas tax. At least partially, this is a double taxation. Remember when we instituted penalties on gas guzzlers? Actually, they were paying a larger share of their tax already. Shouldn't we put a penalty on hybrids who pay significantly less per mile on gas tax?

There's no such thing as a fair tax.
March 4, 2013 | Unregistered CommenterChris
Steve –
Perhaps enough Republicans and Democratics will find their spines and recognize the Highway Fund is repeatedly raided to pay for things that have nothing to do with operating NH highways and byways. Imagine that! Then imagine how much of an additional burden this massive tax proposal will have on the plebes' piggy banks.

If I were an inquiring mind down under the gilded dome, the first thing I would demand is a full audit of the Highway Fund to find out exactly how much has been spent on real things: like bridges and roads. All the rest is either overhead or pilferings by the pols. What are you willing to wager – once the plebes in NH are allowed to do so privately – that there's sufficient funds already collected to perform the core of this constitutional mandate? I bet your estimate of overhead is about half of actual. But I'm a liberal kinda mutt whereas you are such a staunch conservative when it comes to fiscal matters ... :-) Given your peculiar party posture, perhaps you could convince a few Democratic Reps this is wrong for those they at least feign so much concern.
– C. dog on the hunt for a real user fee
March 5, 2013 | Unregistered CommenterC. dog
The interest and dividends tax is on UNEARNED income; that's the difference. It is generally not considered an income tax, because it is ONLY on unearned income. I noted in these remarks how that would be affected if it were to be raised 83 percent. I generally oppose all toll roads (note my thumbs up to Senator Bragdon this week), but we must realize that if we did not have the money from toll roads, the gas tax would have to rise considerably to replace it.
More than a few Dems will vote against this, but I fear many many Republicans--we're talking dozens here, including His Vileness in leadership--will vote for it.
March 5, 2013 | Registered CommenterRep Steve Vaillancourt

PostPost a New Comment

Enter your information below to add a new comment.
Author Email (optional):
Author URL (optional):
Post:
 
All HTML will be escaped. Hyperlinks will be created for URLs automatically.