Maine’s transportation committee approves two-year fuel tax increase

| 6/9/2009

A Maine legislative panel voted to pursue a temporary nickel increase in the state’s fuel tax rate to prop up declining revenue and slumping available funds for roads. But time is running out for passage of the bill.

Currently, the state’s per gallon tax on diesel is 29.6 cents, and 28.4 cents for gas. The tax rates are indexed to inflation. The distinction allows the tax rates to be adjusted annually. The next scheduled increase is July 1 when taxes are expected to go up about 1.1 cents.

Maine isn’t alone in the pursuit of fuel taxes to help prop up transportation funds. Other states looking to charge consumers more at the pump include New Hampshire, North Carolina, Oregon and Vermont.

The Maine Legislature’s Transportation Committee voted to advance a proposed two-year, 5-cent increase in the state’s fuel tax. The panel opted for the nickel increase because there wasn’t support for an increase of 11 cents spread out over four years.

Advocates for the higher tax rates say they would ease a 23 percent drop in fuel tax revenues. Others say that despite the aid of federal stimulus funds being applied to road and bridge work, the gap between available funds and the cost of projects will only expand.

Opponents say that with the poor economy now is not the time to increase the burden on consumers. One suggested alternative to avoid a tax increase was for the Maine Department of Transportation to cut staff and reorganize.

The full Legislature can take up the measure, but support is not assured. House and Senate Democrats, which are the majority party in both chambers, said they won’t move forward without bipartisan support.

While Gov. John Baldacci has opposed tax increases in the past, the governor said he would consider a proposal if it has broad bipartisan support, the Portland Press Herald reported.

Time is running out for lawmakers to make a decision. The Legislature is scheduled to adjourn by the middle of next week, but House and Senate leaders are trying to wrap up by the end of this week.

To view other legislative activities of interest for Maine in 2009, click here.

– By Keith Goble, state legislative editor

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