Panelists debate excise tax ballot measure

Posted Sept. 23, 2009, at 8:38 p.m.

BREWER, Maine — By now, each side could make the other’s point.

Question 2 on the November referendum ballot would reduce Maine’s automobile excise tax on newer vehicles and offer an estimated $80 million in tax relief. To the initiative’s supporters, it’s that simple.

“Vote yes, pay less,” Chris Cinquemani, chairman of the Yes on 2 campaign, repeated at a forum Wednesday in Brewer.

Opponents of Question 2, however, contend that there are real consequences to reducing that tax revenue, specifically a drop-off in municipal services such as road maintenance. Additionally, the proposal would affect taxes only on vehicles 5 years old or newer, an indication that only those who can afford new cars would benefit.

“The financial impacts of this are very calculable,” countered Geoff Herman of the Maine Municipal Association, one of several state groups opposing Question 2. “There will be a 40 percent reduction in municipal revenue that would result in either increased property taxes or a reduction of services.”

Two panelists representing each side of the issue made their case Wednesday at a breakfast hosted by the Bangor Region Chamber of Commerce. Cinquemani and Tarren Bragdon, director of the conservative Maine Heritage Policy Center, advocated for the excise tax proposal while Herman and Peggy Daigle, manager of Old Town, represented the opposition to Question 2.

The question that will appear on the ballot reads: “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 exempt hybrid and other alternative-energy and highly fuel-efficient motor vehicles from sales tax and three years of excise tax?”

Wednesday’s debate was civil but the rhetoric was decidedly partisan, suggesting the discussion will likely only heat up as November approaches.

Bragdon specifically challenged the Maine Municipal Association’s credibility to talk about taxes.

“What have they done to reduce auto excise taxes?” he said. As for the revenue loss to municipalities, Bragdon said towns and cities should look closer at efficiencies. “We can’t just spend our way to prosperity.”

Herman responded in kind. He said supporters are trying to scare people by calling the excise tax the most-hated tax in Maine.

“How do you measure that?” Herman asked. “And do you really want to build policy on hatred?”

The MMA official also disagreed with Question 2 supporters that the current excise tax structure is regressive. For the record, auto excise taxes are calculated based on the age of the vehicle and the suggested retail price, so they decrease over the life of a car.

If Question 2 passes, excise taxes would be cut roughly in half on vehicles 5 years old and newer. Vehicles older than that would not see any change. Opponents often point out that nearly 70 percent of vehicles on the road in Maine are older than five years.

“I see this as giving a benefit to only a few residents,” Daigle said.

She also said if Question 2 is approved, Old Town would lose an estimated $500,000 in annual revenue. Daigle said there is a real disconnect between cutting taxes and what the effects of those cuts are.

“We’d be looking at a total restructuring of the city. What services could we do away with?” she said.

Cinquemani argued that local officials are seizing on the doom and gloom of potential reduction of services.

“Why are opponents worried more about continuing to spend our money?” he said. “We must pass tax relief.”

Most who attended Wednesday’s forum were either local municipal leaders or businesspeople who already are decided on Question 2, but John Diamond, chairman of the Chamber’s board of directors, said it’s important to foster two-sided debate.

Another forum is planned in Oct. 7 on Question 4, referred to as the Taxpayer Bill of Rights, which would create further limitations on local and state spending.

erussell@bangordailynews.net

990-8167

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business

Similar Articles

More in State