To hear Transportation Commissioner Chuck O'Leary tell it, "this is a watershed moment" for the state's roads, highways and bridges. In short, O'Leary says, the state has made too many promises at a time when construction costs are surging and tax and toll revenues aren't keeping pace.

"I don't need a world-class economist to say that if you don't raise your prices since 1989, you probably can't afford to buy a lot of new things," O'Leary said in an interview last week, referring to the last time New Hampshire increased tolls. And the state hasn't increased gas taxes since 1992.

Since taking charge in March, O'Leary hasn't been shy about exposing the dismal state of his department's finances. Lawmakers are getting the message. Talk of gas tax increases, higher tolls and other money-making ideas is swirling at the State House.

O'Leary is "holding up a mirror for all of us," said Sen. Peter Burling, a Cornish Democrat. "We need to think of a system in which we can maintain our infrastructure properly. And I say, 'Bravo, commissioner.' "

Lawmakers have known for several years that money for road projects was tight. But they credit O'Leary for making sense of the department's messy finances and laying out, in plain language, just how bad the situation is.

"I think the urgency has been there all along," said Rep. David Campbell, a Nashua Democrat who is on a committee studying the turnpike system. "It just wasn't manifested to enough people because of the disorganization in the department prior to O'Leary.. . . It's now clear to anyone who looks at the numbers that we have a tremendous shortfall in both the highway fund . . . and the turnpike system.

"There are those who will make political hay out of this, (saying) it's a big-government issue," Campbell said. "But it isn't. It's just crumbling infrastructure and a revenue base that hasn't been adjusted in 15 years."

Just plain broke

Talk of money-making options is centered on the two sources of income: the gas tax and tolls.

The turnpike system, which consists of the Spaulding and Everett turnpikes and Interstate 95, is supposed to be self-supporting through toll revenue. The highway fund, meanwhile, pays for projects such as the proposed Interstate 93 expansion with revenue from the state tax on fuel and vehicle registration fees. A majority of transportation projects are financed with money from the federal gas tax, said Bill Watson, administrator of the transportation department's Bureau of Planning and Community Assistance.

The highway fund is broke, O'Leary said, and there isn't enough money in the turnpike fund to expand that system.

O'Leary - who is an interim appointee and will leave in December - recently disclosed bad news about the 10-year highway plan, which includes proposed improvements to state roads, bridges and highways. The current plan would take 35 years to complete, O'Leary said. He proposed cutting more than $1 billion worth of projects from the plan. The state should focus on maintaining current infrastructure and scale back some major projects, he said. Lawmakers approve a new 10-year plan every two years, and they are due to update the plan next year.

Although O'Leary has laid plain the state's revenue problems, lawmakers are far from reaching consensus on a fix. Some, such as Concord Rep. Candace White Bouchard, the Democratic chairwoman of the House Public Works Committee, are willing to consider "an adjustment to the gas tax."

Gov. John Lynch, however, opposes an increase in the gas tax, and Democrats acknowledge that such a move could make them vulnerable to attacks. Although Lynch hasn't ruled out increasing tolls or adding tollbooths, those changes also carry political risks.

"Invariably, gas and toll increases land hardest on poor people who can least afford them," said House Transportation Committee Chairman Jim Ryan, a Franklin Democrat who opposes a rise in tolls or the gas tax. "I think we're going to have to look very closely at what we can economize from within the department."

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