Is Lynch’s bonds-for-roadwork plan the right course for state?

In his Feb. 15 budget address, Gov. John Lynch called on the state to address critically needed repairs along the state’s roads and bridges. But the way he wants to pay the $60 million tab – which includes $15 million for road repaving work — has drawn questions and criticisms.

Lynch’s budget proposal calls for floating $60 million in state-backed bonds and hike car registration fees by $6 to cover various highway-related costs over the next two-year budget cycle. The annual registration fee is expected to generate about $9.6 million.

The governor said the borrowing would allow the state to nearly double the number of bridges on the state “red list” that will receive critical repairs. Under his proposal, some 57 bridges will be targeted for repairs.

While Linda Hodgdon, Lynch’s budget director, has said the bonding is appropriate because the money raised by the bonds would be used for state projects that have at least a 20-year life span. But critics – including former a former House Finance Committee chairman — have their doubts.

“We’ve always done it on a pay-as-you-go basis. We can’t do that now,” the former chairman, Rep. Neal Kurk, R-Weare, told the Nashua Telegraph. “The $60 million borrowing request in the governor’s proposal is a stopgap. The long-term answer is more money going into the highway fund.”

Kurk said it makes more sense to raise the state tax on gasoline than it does to borrow money.

Lynch has said he opposes raising the gas tax or tolls. The state’s gasoline tax has remained 18 cents per gallon since 1989. Tolls finance work on the state turnpike system, and those charges have remained unchanged since 1991.

But Rep. Steve Stepanek, R-Amherst, said Lynch’s increase in the fee is less fair than raising the gas tax. “Wouldn’t it be more fair and appropriate to raise the gas tax to cover that when it is fairly distributed among the people who use the roads whether it’s New Hampshire citizens or out-of-state citizens?” Stepanek said.

Hodgdon, however, said that the car registration fee has not increased since 2001, and “we thought that was an appropriate match. There can be very different opinions on that.”

While Legislative Budget Assistant Michael Buckley said he could not recall a state that borrowed money to cover already-planned state highway or bridge upgrades, in 1993 the Legislature did float $1.3 million in bonds to speed up the widening of Route 106 in Loudon to improve traffic flow to the New Hampshire International Speedway.

But borrowing money for road and bridge upgrades could work out financially for the state, according to Edwin Smith, administration director for the Department of Transportation.

With annual inflation-paced increases for salt, concrete, construction steel and other items, Smith reasoned, “If the rate to borrow is 5 percent, even 10 percent, that’s a lot lower than the inflation rate we’ve seen,”

In his budget address, Lynch also promised to crack down on what he deemed was misuse of highway fund money, which is currently running at a $10 million-a-year deficit – a deficit that was one of the reasons the governor cited earlier this month in asking Transportation Commissioner Carol Murray to resign. The deficit, he said, is directly tied to the delays and higher costs of state bridge and roadwork.

“State agencies must stop using the highway fund like an ATM,” he said.

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