Gas Tax Chicken

Posted May 28, 2009, at 6:32 p.m.

Members of the Legislature’s Transportation Committee understand the problem of declining gas tax revenues and they know there are only a few solutions. But as with many problems, legislators are stopping short of committing to a fix, because neither party wants to be solely associated with the necessary tax increase.

It is time for both parties to take the plunge and do what needs to be done. Maine is geographically challenged, and if its roads and bridges fall into further disrepair, the combination would seriously handicap the state’s economic development efforts.

Currently, the bulk of bridge and highway construction and repair in Maine is paid for through the state highway fund. More than two-thirds of the fund comes from fuel taxes. The fuel tax is an excise tax, as opposed to a sales tax, so consumers pay the same amount of tax per gallon of gas, regardless of how much that gallon costs. In 2002, then-Gov. Angus King proposed and won approval of the current tax mechanism, which ties increases to the rate of inflation. But the sagging economy has meant that there have not been revenue hikes.

In addition, the memories of $4 per gallon gasoline are fresh enough to continue to cast a shadow over people’s driving habits, resulting in an even bigger hit to the highway fund as people drive less and buy more fuel-efficient vehicles. In March, fuel tax revenues dropped by 23 percent, and for the first nine months of the 2008-09 budget cycle, they are down by $7.7 million; the fund was projected to have $342 million.

Sen. Dennis Damon, co-chairman of the Transportation Committee, has said the gap between available funds and the cost of projects that must be completed is approaching $1 billion. Even with federal stimulus funds being applied to road and bridge work, the gap will remain, and it will grow.

The fixes range from the simple, such as a hike in the fuel tax, to the complex, such as the plan Sen. Damon proposed a few years ago to create a transportation endowment fund to leverage bonding. User fees, relying on high-tech tracking devices on cars to record miles driven, have even been discussed. All the fixes would have Mainers prying open their wallets.

Yet, Gov. Baldacci maintains that this is not the time to raise taxes.

The Transportation Committee recently considered an 11-cent increase to the fuel tax, to be phased in over three years. Sen. Joe Perry, D-Bangor, said that even transportation lobbyists supported the idea. But Republicans, for now, do not want to be associated with the hike. And Democrats do not want it to be solely their plan.

It’s understandable that no one wants to be associated with a tax hike during a recession, but the transportation funding gap calls for leadership, the kind that persuades people that some pain now will mean less pain later. Another plan is expected to come from the Transportation Committee in the coming days. It is imperative that a plan gains bipartisan support.

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