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Paul Davis

A Gas Tax Increase is a Poor Way to Raise Revenue for Maine
By Senator Paul T. Davis, Sr.
Aug 28, 2003 - 7:08:00 PM

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Driving from Sangerville to Augusta nearly every day during the past five years has made me very mindful of gasoline prices. Lately, I could not help but notice the hit my wallet has taken at the gas pumps. I suspect that I am not alone. Unfortunately, it is about to get worse. The state of Maine, along with the rest of the nation, has experienced unusually high gas prices during the past year. Some in the Maine Legislature, however, do not think that gas prices are high enough and have successfully pushed a bill through Augusta that will raise the tax on gasoline - brace yourself - automatically every year.

The automatic tax increase, which is based on the rate of inflation, is a poor way to raise revenue and a real burden on Mainers, particularly those of us in rural Maine who travel long commutes to and from work each day. The tax hike will also hurt our businesses, which will be charged more for transporting goods to stores. Logically, this added cost will be passed on to the consumers.

Most Mainers would be shocked to learn how much they pay in taxes at the pump. You pay 18.4 cents per gallon in federal taxes, along with the 24.6 cents assessed by the state of Maine (up from 19 cents per gallon just a few years ago), bringing the total to a whopping 43 cents in taxes for each gallon of gas purchased (50.1 cents for diesel).  If you pay $1.40 a gallon, the actual cost of the gasoline is only 97 cents per gallon. I think everyone can agree that even by Maine's standards, this is a hefty percentage to pay in taxes, especially considering that neighboring New Hampshire's total state and federal gas tax is 36.4 cents per gallon.

The Highway Fund is used to fix all of Maine's roads and highways except the Maine Turnpike. It is funded by Maine's gas tax.  The tax pays for road construction, maintenance and repair, as well as the cost of building bridges. However, the Highway Fund is in a constant state of flux. During the 119th Legislature, it was short approximately $35 million and the gas tax was raised to make up the difference. This session, the Legislature actually took $65 million from the Highway Fund to make up for a shortfall in the General Fund. This does not seem like a responsible way to do government business.

We all agree that the Highway Fund needs a stable and predictable source of revenue. Several years ago the Senate Republicans proposed that a portion of the existing sales tax paid on the purchase of vehicles be dedicated to the Highway Fund to supplement the gas tax. This measure would keep up with inflation, but most importantly it doesn't raise anyone's taxes.

Maine has the highest tax burden in the nation.  Increasing another tax of any kind is the wrong solution. Residents in rural counties already pay more for gas than consumers in southern Maine, and increasing the cost of gasoline will only make their burdens heavier.'

Fortunately we in the Legislature will have an opportunity to vote down this tax increase each year. It is my hope that Maine residents will let their local legislators know exactly how they feel about a tax increase being put on autopilot. There is no excuse to raise any taxes in Maine. We are paying dearly for years of excessive spending. Unfortunately the surplus years are behind us and with lean times ahead, we must tighten our belts and decide what our priorities really are and then meet them without raising taxes.

Paul Davis (R-Sangerville) is the Maine Senate Republican Leader


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