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Thursday, April 28, 2011

Short-term gas-tax cut moves along

CONCORD – A temporary 5 cent cut in the state’s gasoline tax to help struggling car and truck owners cope with soaring gas prices is halfway to the desk of Gov. John Lynch, who again Wednesday called the proposal a “gimmick.”

The House of Representatives overwhelmingly embraced the idea Wednesday by a 208-98 vote. That was the easy half of the journey for this pet project of House Speaker William O’Brien, R-Mont Vernon, who only five days ago came up with the idea to cut the 18-cents-a-gallon gasoline tax between now and June 30.

“Without question, the top concern of my constituents of all political backgrounds has been the high price of gasoline,” O’Brien said in a statement.

The House wants this tax cut to replace a Senate bill (SB 78) that would put an early end to an unpopular $30 surcharge on annual car and truck registrations. House and Senate leaders have already agreed to repeal the fee June 30, but the Senate bill would have ended it beginning in May.

Lynch is also no fan of repealing the surcharge because he relied on revenue from the $30 fee for another two years in the state budget plan he offered in February.

Senate President Peter Bragdon, R-Milford, said O’Brien’s gasoline tax cut gambit faces an uncertain fate in a state Senate consumed with trying to craft a balanced state budget for the next two years.

Sources have said the Republican-dominated Senate may decide to reject O’Brien’s gas tax and kill the bill altogether, which would be an embarrassing setback for the new House leader.

Meanwhile, Lynch repeated his claim that cutting the tax temporarily would not translate to lower prices at the pump and would rob the state’s highway fund of nearly $7 million, with 12 percent of that money dedicated for local road and bridge work.

Lynch repeatedly refused to say whether he would veto the bill, maintaining he remains confident it won’t get that far.

House Majority Leader D.J. Bettencourt, R-Salem, challenged Lynch to come up with a plan to deal with the cost of gasoline, averaging more than $3.80 a gallon statewide and cresting above $4 at some outlets.

“Legislators in Massachusetts don’t think this is a gimmick,” said Bettencourt, who represents Salem. That border town gets an influx of out-of-state residents who come for cheaper gas, liquor and cigarettes. “To summarize, they are saying New Hampshire is killing us.”

Cutting the tax is a way for GOP lawmakers to keep promises they made to the voters that handed them super-majorities in the Legislature last November, Bettencourt stressed.

“Let’s not forget why we were sent here,” Bettencourt began. “We were sent here to do what we could for our citizens, to help them get through these hard economic times.”

Rep. David Campbell, D-Nashua, said there’s no correlation between gas taxes and the prices motorists pay.

Campbell cited studies that the state’s roads and bridges were ranked 11th worst in the country, and that the wear and tear on New Hampshire cars and trucks from existing roads cost an estimated $259 in annual repairs.

“This temporary nickel reduction will not save taxpayers money; it will, in fact, cost taxpayers more,” Campbell said. “You have seen the pumps; the prices have gone up five, 10, 15 cents a day and the oil companies are reporting record profits.”

Rep. Terie Norelli, D-Portsmouth and the former speaker, agreed and chastised O’Brien’s leadership team.

“The majority should be ashamed of trying to fool New Hampshire voters with this irresponsible stunt,” Norelli said in a statement.

Rep. Ken Weyler, R-Kingston, said the state’s highway fund has a $16 million surplus and that paving contracts for the rest of the year went out in February.

“It’s not going to halt fixing the roads; it’s not going to halt fixing the bridges,” Weyler said. “Most of the work has already been arranged. The work will go on this summer. You won’t see more holes in the road than you would have seen already.”

The state’s gasoline tax is the ninth lowest in the country and has not been raised since 1991.

Lynch’s reluctance to threaten a veto continues a history of political caution on the subject.

During his 2006 re-election campaign, Lynch savaged his little-known Republican opponent for even suggesting a gasoline tax would be needed to pay for projects already counted on for the 10-year highway plan.

Throughout a seven-year career as chief executive, Lynch has repeatedly vowed to block any gasoline tax hike.

At a public hearing earlier this week, O’Brien’s pitch drew strong opposition from construction material makers, highway construction company executives, the state workers union and Transportation Commissioner George Campbell, among others.

They all claim it would rob cities and towns of up to $840,000 in local highway aid. State officials warned it could even delay buying $2 million of paint to redraw all the white lines on the highways.

Diana Lacey is president of the State Employees Association.

“It’s irresponsible. Our road system is the crown jewel for New Hampshire,” Lacey said. “We are reaching for the sky with a feel-good measure. It’s opening Pandora’s box of unmet infrastructure needs, and it’s risking our public safety.”

Critics also note it was a Republican-controlled Legislature led by current House budget chief Weyler who blocked then-Republican Gov. Steve Merrill from going forward with a similar gasoline tax holiday in the mid-1990s.

Kevin Landrigan can be reached at 321-7040 or klandrigan@nashuatelegraph.