Highway budget calls for increased fuel tax

Posted April 07, 2009, at 9:39 p.m.

AUGUSTA, Maine — Motorists in Maine would pay about a penny more per gallon in fuel taxes as of July under a state highway budget that was under review Tuesday in the Legislature.

The Transportation Committee held a work session on a $649 million budget for the two years that start July 1, but no vote was expected immediately. The bulk of the money comes from fuel taxes, and those taxes are scheduled to rise in July.

The current 28.4 cent-a-gallon gasoline tax would rise by 1.1 cent as of July 1, and the 29.6 cent-a-gallon diesel fuel tax would also rise by 1.1 cents on the same day. Further fuel tax changes in July 2010, also based on the consumer price index, are pending.

The highway budget is separate from the proposed $6.1 billion General Fund budget, which covers all other nontransportation services provided by state government.

Most of the transportation budget goes to highways, bridges and other facilities, and the rest goes to motor vehicle and public safety agencies. Conservation measures taken by motorists, who have seen prices at the pump fluctuate wildly in the last year, will take a toll on transportation revenues in the next budget cycle.

In recent years, indexing has helped to shore up the transportation budget as fuel tax revenues declined with falling fuel consumption, Deputy Transportation Commissioner Bruce Van Note told lawmakers in a presentation earlier this year.

As travelers bought more fuel-efficient vehicles, used car pools and took other steps to avoid higher fuel prices, fuel taxes decreased, even with indexing, between fiscal 2008 and 2009, Van Note said. Fiscal 2009 ends June 30.

Looking ahead, highway fund revenues will be down 3 percent from the current budget cycle, Van Note said. In another reflection of tight finances, the budget calls for elimination of 118 full-time positions, 42 of which now are filled, in the Transportation Department.

Other belt-tightening measures proposed in the spending package include eliminating some truck purchases while reducing the department’s fleet by more than 50 trucks, privatizing custodial duties at some of the visitor information centers, closing restrooms at some of the centers and turning off highway lighting during little-used hours.

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