Panel backs 2-year, 5-cent gas tax hike

Posted June 01, 2009, at 9:36 p.m.

AUGUSTA, Maine — Scrapping a permanent tax increase of 11 cents spread over four years, the Legislature’s Transportation Committee in a 10-3 vote on Monday proposed a two-year, 5-cent increase on the state’s fuel taxes.

“There clearly was opposition to having 11 cents even though it was over four years and is needed,” said Sen. Dennis Damon, D-Trenton. He is co-chairman of the committee and offered the temporary, 5-cent tax increase as an alternative.

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“This gives us the revenue for our road maintenance program that would virtually have no resources without it,” he said. “This does not solve the problem for the long term, but it does for this budget.”

The committee is under pressure to complete work on the budget to operate the Department of Transportation for the next two years. But without the additional revenue in the separate tax measure, there would not be enough funding for maintenance and repair of state roads, only funding for major capital projects designed to rebuild the roads to last at least a decade.

The measure does not affect the $131 million in federal stimulus funding that has been allocated for several road repair and improvement projects already under way.

While the latest proposal has bipartisan support on the committee, some Republicans on the panel are opposed to any tax increase.

Rep. Doug Thomas, R-Ripley, said the DOT should cut staff and reorganize to provide funds for roads instead of raising taxes, even if the increase is for only two years.

“I don’t think we have a crisis,” he said. “I don’t think we have near the crisis that some of the families have in my district that have lost their jobs.”

Deputy DOT Commissioner Bruce Van Note defended the department, arguing that over the last five years the agency has cut more than 200 positions. He said the agency still faces the fundamental problem of less revenue and higher expenses — and no indication that will change.

“I don’t hear any specifics, all I hear is generalities that we should do better,” he said.

Not all Republicans are opposed to the temporary tax increase. Sen. Walter Gooley, R-Farmington, and Rep. Kimberley Rosen, R-Bucksport, supported raising fuel taxes.

Committee members —whether they support the temporary tax increase or not — acknowledge that the DOT is facing a serious funding problem that will get worse in future years.

“This proposal does not solve our long-term problems,” said Sen. Joe Perry, D-Bangor. He said the use of the fuel excise tax as the fundamental source of revenue needs to be changed, with Mainers driving less in more fuel-efficient cars and trucks.

“It’s not a dependable revenue source,” he said.

Committee members also are frustrated by what many perceive as a lack of understanding of the serious financial problems facing DOT and the deteriorating condition of many roads and bridges.

“The public and even the legislators themselves do not get what we know. They don’t get it,” said Rep. George Hogan, D-Old Orchard Beach. “And that frustrates the what out of me.”

While the state budget for most of government is now law, the budget for DOT has not been completed. The budget year ends June 30. The committee drafted what Damon called a “contingent” budget that allocates the additional $70 million from the temporary tax hike if it is approved.

“If the additional revenue is not approved, we will have to go back to a budget that is woefully inadequate,” he said.

Maine’s gas tax is 27.6 cents a gallon and the fuel tax on diesel is 28.8 cents. Under the annual adjustment for inflation, the fuel taxes are scheduled to go up about 1.1 cents on July 1.

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