Ellsworth panel pans excise tax, TABOR II measures

Posted Sept. 21, 2009, at 10:54 p.m.
Last modified Jan. 30, 2011, at 11:56 a.m.

ELLSWORTH, Maine — City councilors on Monday panned the excise tax and TABOR II citizen initiative proposals and voted to formally oppose both measures.

The vote was 6-0 with Councilor Matthew Foster abstaining.

The excise tax initiative asks voters: “Do you want to cut the rate of the municipal excise tax by an average of 55 percent on motor vehicles less than six years old and to exempt hybrid and other alternative-energy and highly fuel-efficient motor vehicles from sales tax and three years of excise tax.”

The TABOR II initiative asks voters: “Do you want to change the existing formulas that limit state and local government spending and require voter approval by referendum for spending over those limits and for increases in state taxes.”

Both measures will appear on the statewide ballot for the Nov. 3 elections.

Councilors opposed the excise tax proposal because of the impact they said it would have on the city’s budget and the city’s roads.

City staff projected that the measure, if approved, would result in a decrease in excise tax revenues of $477,588, a decrease of 37.09 percent. Most of the excise tax revenue is allocated to the city’s highway accounts. Councilor Gary Fortier pointed out that the city allocates about $1.3 million for the roads and that taking almost $480,000 out of the highway account would force the city to either reduce work on its roads or to raise property taxes.

“We can see that there is no fat in these budgets,” Fortier said. “There is no other place to go but to increase taxes or cut services. I think the taxpayers of Ellsworth are smart enough to see through this and to rescue the city’s roads.”

Councilor John Phillips noted that to make up that amount of money the city would have to look either to the property tax or to the state of Maine. Given the state of the state’s finances, Phillips said, help from Augusta is unlikely. Councilor John Moore added that the state likely will be cutting state aid to municipalities.

“We’re not just going to lose the excise tax,” he said. “We’re going to be losing money from a variety of different things.”

Councilor Stephen Beathem, who initiated the discussion, said that while the excise tax was not a popular tax, it was a fair one.

“If you can afford to buy an expensive vehicle, you pay more [excise tax] than someone who can’t afford it,” he said.

Of 7,773 excise tax transactions this year, 5,263 were on Step 6, or year six, where there would be no change in the excise tax, according to City Manager Michelle Beal.

“Five thousand, two hundred and sixty-three people would see no reduction in their excise tax,” she said. “They will see an increase in their property tax.”

Beathem said that TABOR II would penalize municipal government unfairly, noting that the people of Ellsworth elected councilors to represent them.

“If they don’t like the way we are spending their money, they can tell us so by not voting us into office,” he said.

Fortier pointed out that Ellsworth’s budget is conservative.

“Ellsworth does not have a spending problem,” he said. “Augusta has a spending problem.”

He said that if TABOR passed, it would bring to a halt the progress the city has seen and hit all of Ellsworth’s municipal services.

“This will take the financial management of the city out of the hands of the people and put it into a formula designed by someone else,” he said. “It’s a slap in the face for anyone who volunteers to do municipal service.”

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