Department of Safety warns highway fund growth lags rising costs; outlines road‑toll and DMV revenue trends

Department of Safety leaders told the House Ways and Means committee that while Highway Fund collections have edged above short‑term projections, long‑term revenue growth is insufficient to meet rising costs for highways and safety operations.

The Highway Fund collected $263.9 million in fiscal 2024, $4.0 million above the plan of $259.9 million, Department of Safety Director of Administration Amy Newbury said. For fiscal 2025 the department projects $261.2 million in highway fund receipts, about $800,000 above the plan of $260.4 million. Newbury said highway‑fund annual growth averaged 0.51% between 2018 and FY2024, a pace she described as “modest” and not keeping up with the costs the fund supports.

The nut of the presentation was that the Highway Fund supports Department of Transportation work and several functions inside the Department of Safety, including the Division of State Police. Newbury said structural deficits emerged because revenues have not matched rising operating needs; to cover shortfalls the legislature transferred $50 million in general funds during the FY2022–23 biennium and an additional $10 million in the FY2024–25 biennium.

Jennifer Hall, bureau chief of the Road Toll Bureau, explained that New Hampshire’s motor fuel tax (referred to in the state as the “road toll”) is collected at the licensed distributor level. Distributors report deliveries to Road Toll, which determines when a sale is taxable (for example, retail sales to filling stations are taxable; sales exported out of state or between licensed distributors are treated differently). Hall said the bureau administers about 53 motor‑fuel distributor licenses, 61 motor‑fuel transporter licenses and 1,679 IFTA (International Fuel Tax Agreement) licensees.

Hall described factors affecting road‑toll receipts: gasoline prices (she cited AAA figures showing an average New Hampshire price of $2.974 per gallon as of Jan. 28 and noted national EIA forecasts), weather and tourism patterns (dry summers and snowy winters raise consumption), and macroeconomic trends. She said FY2024 road‑toll receipts were about $127.9 million, about $2.9 million above plan, and FY2025 projections are $127.7 million; the FY26–27 forecast assumes a 0.2% biennial increase partly from electric and hybrid vehicle surcharges implemented in September 2023.

On licensing and compliance, Hall said the oil discharge and pollution control license is perpetual (no annual license fee), and the bureau recently filled audit positions and hired a part‑time fuel enforcement officer to improve dyed‑fuel enforcement. Committee members asked whether the state’s forensic lab could handle dyed‑fuel testing to speed results; Hall said it was not yet under discussion but could be explored.

Newbury also reviewed motor vehicle registration and driver licensing revenues. She said FY2024 registration revenue for the state’s share was $93.1 million, about $2.9 million above plan; FY2025 is projected at $90.4 million. She and committee members discussed cyclical dips caused by a shift from four‑year to five‑year registrations and the effects of changes in vehicle age and demographics. Newbury noted that registration fee numbers she provided were the state share deposited to the Highway Fund (local town clerk fees and local sliding‑scale fees are separate). She said inspection revenues remain steady near $4 million per year and that plea‑by‑mail revenues (moved to the Highway Fund in FY2020) were $5.6 million in FY2024, below plan.

Committee members pressed for additional breakdowns—e.g., by registration weight class, by Real ID versus other operator licenses, and for data on total vehicles on New Hampshire roads (including tourists). Newbury agreed to follow up with the DMV for the weight‑class and licensing counts and said daily vehicle counts for tourists are not available without continuous surveys. Members also asked about state police vacancies and enforcement; Newbury noted the department has vacancies and is hiring classes of recruits but did not provide a statewide enforcement staffing solution in this presentation.

The Department of Safety presenters repeatedly cautioned that many revenue lines are volatile and can be affected by external events; they said legislative support and strategic planning remain important to sustaining the funds and programs the Highway Fund supports.

Newbury and Hall said they would provide follow‑up data requested by committee members, including DMV registration breakdowns by weight categories and counts of Real ID/other license types.