Car excise tax: Too high or necessary?

LEWISTON — Maine voters get the chance to vote for lower motor vehicle excise taxes, thanks to a citizen's initiative that placed it on the Nov. 3 ballot, though municipal officials who oppose the change say there will be consequences if the question is approved.

Question 2: "Do you want to cut the rate of 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?"

The proposal would cut motor vehicle excise taxes from current rates by 50 percent the first year and by even higher percentages for the next three years. It would also exempt hybrid automobiles or those that get at least 40 miles per gallon of gas from both the sales tax and the first three years of excise tax.

Chris Cinquemani, chairman of More Green Now, a political action committee supporting the question, said its passage would save Mainers $80 million a year.

"We see this as an opportunity to put more money back in Mainers' pockets and to reduce a particularly burdensome, unfair tax," he said. "We also thought this was an opportunity to support mainstream, responsible environmental conservation and efficiency by Mainers in their daily lives."

But many municipal officials across the state have spoken out against the measure because of the impact they fear it will have on their local budgets.

"In our case, what is collected for excise tax, something in the order of $4 million, is all dedicated to road maintenance," said Phil Nadeau, Lewiston's acting city administrator. The city has not officially taken a position on the issue, but Nadeau himself has been outspoken against it. The Maine Municipal Association also opposes the measure.

Nadeau said excise tax is one of the few revenues that stays within the municipality where it's collected, unlike many that are passed through to the state General Fund before getting redistributed.

"This is an amount that's collected effectively for the use of your vehicle and in exchange for that amount, we dedicate every dime that we collect toward the maintenance of those roads," he said.

If approved, municipalities would see their excise tax collections reduced by 30 to 40 percent, according Nadeau, who said that would be about $1.6 million in Lewiston. In looking to offset the reduction in revenue, Lewiston officials would likely look at its entire budget, rather than just make corresponding cuts to the road maintenance budget, Nadeau said.

"I don't care what it is we are going to do, something is going to happen to the way we deliver programs and services that is going to make someone unhappy," he said.

Cinquemani said there's near universal agreement that government is spending too much and that there needs to be better priorities both at the state and local levels.

"We can't just automatically assume there are no opportunities to find savings at the town level," he said. "With Question Two, we're creating the tax relief, now it's up to government to find efficiencies. The arguments and the threats and the doom-and-gloom scenarios are disingenuous and they're unfair."

Cinquemani said if excise taxes are reduced, Maine families will win.

"We're trying to create an environment here where families can make ends meet," he said. "We cannot afford just to blindly spend money. It's not going to work, it's bad."

Nadeau said the question is really about Mainers deciding what level of service they want from their local governments.

"What is it I'm prepared to pay for in my community?" he said. "If you're prepared to pay for less, your expectations are less relative to programming."

rmetzler@sunjournal.com

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Displaying comments, from newest to oldest

byronmcclellan's picture

An excise at the rate of $25

An excise at the rate of $25 per one thousand dollars of valuation (effective 1/1/81) is levied on each motor vehicle. Information on the value of a motor vehicle is accessed electronically through a data bank complete with valuation figures. Different sources provide the valuation figures depending upon whether the motor vehicle is an automobile, a truck, a motorcycle, or a trailer. For example, automobile valuations are derived from figures published in the National Automobile Dealers Association Official Used Car Guide (NADA), to which the Registry has electronic access. Most public libraries have copies of NADA and other motor vehicle official guides. The other excise tax that applies to some new cars is a 4 percent tax (for 2001) on any portion of the sales price of a car that exceeds $38,000. For 2002, the tax is scheduled to decrease to 3 percent and will expire after 2002. The dollar threshold above which the tax is imposed is indexed for inflation each year. The tax is collected by car dealers and reported by them to the government. For more details you may go to Personal injury lawyers.

foxylady1938's picture

Elizabeth Smith Excise tax

Elizabeth Smith
Excise tax do away with it. I lived in Iowa for over 20 years before moving back to Maine. They do not have an Excise Tax or inspection stickers. But their roads are better than ours will ever be. We have a lot of traffic, especially in the summer, but they have more heavy trucks moving over their roads too. I don't know how they keep their roads up, but they do.

rstonge's picture
verified

Cars cannot and do not

Cars cannot and do not causes accidents. I have never seen a car suddenly just crash. People cause the accidents. Someone has to be behind the wheel to operate the car.

Robert61's picture

The reason this and the

The reason this and the recycled Tabor bill could pass is that people are so fed up with high taxes. Unfortunately the aim is now directed locally as efforts to control state spending have failed miserably. Each time the state needs to cut it simply reduces what it gives the towns and they then have to either cut services or raise taxes...they are in all means the end of the road for taxes. What we need is real tax reform in Augusta - and that wil need to include limiting welfare to federal standards only, not allowing even more. It will require doing away with programs that are costing more in administrative costs than any good they might provide. As to roads, a good start would be to force the turnpike authority to place a % of its revenue into maintaining roads within 2 miles of any exit. That small change could allow towns and cities to better manage their roads and make the turnpike responsible for the large number of traffic that not only uses their roads but eventually end up on our streets. Next, allow towns to share in moving violation fines, all of which now goes to the state. Put local cops in place to enforce and get enough back from the state to cover costs and you'll see insurance rates go down and less damage to roads from cars moving to fast or those with too heavy a load to be on them.

L-Town's picture

Robert61... Once again we

Robert61... Once again we can agree... u get smarter as time goes on... your the man

schaujody's picture
verified

candiceanne: The Maine

candiceanne: The Maine Turnpike was built in 1947 (the first part), the Interstate system wasn't around then, that is why it was a toll road, it became part of the I95 system only after our congressional delegation begged for it. The Turnpike Authority continues the tolls "to pay for upkeep", so that means it should be lowered.
The excise tax "may" be used for roads and streets or it can just be lumped in to the General Funds, some cities/towns do it one way, some another. In the end if this proposal passes some other tax or fee will increase; most likely property taxes - which in most of Maine are already sky high - BUT - residents keep demanding new or better services. Which would any of us like to do without? Fire? Police? Roads? Trash pickup?

candiceanne's picture

My point exactly. Where the

My point exactly. Where the heck ia the upkeep that all those tolls should be paying for. The rest of I-95 is toll-free and it is most definitely not in this condition. You do deal with regular construction but that just means the rest of the states are serious about maintenance and they are not collecting tolls.

momof4's picture

I actually agree with SOME

I actually agree with SOME of Tron's thinking. go figure! Where is the part that states "...motor vehicles less than six years old...? There would be no reduction in excise for any car over 5 years old. 68% of cars registered in Maine are older than 5 years. This is a shift and shaft, as property taxes will invariably go up, as folks already complain that they do not receive ample services for their dollars spent on taxes. And I am a Republican!

jayla's picture

We're all losers if this

We're all losers if this passes. If we aren't paying the excise tax, where do you think the balance of the 55% revenue is going to come from? You got it! PROPERTY TAX INCREASES.

ihaterainydays's picture

The people that will suffer

The people that will suffer if this passes is property owners and people that cannot afford to buy new vehicles. If you drive a car, you should pay your share of excise tax. The money lost will need to be made up somewhere else which will result in property taxes increasing yet again. My car didn't qualify for the cash for clunkers....I bought my home 1 year too early for the $8k credit, my taxes just went up....I'm starting to feel a bit screwed

candiceanne's picture

I have driven through a lot

I have driven through a lot of states and you absolutely know when you are on a road in Maine. They are by far the worst of any place I have been. When you cross that bridge from NH into ME it is like crossing into another country and the Maine Turnpike authority as been collecting tens of millions of dollars since I-95 was built with federal money. I can not think of a secondary road in another state that is in as bad a condition as Maine's section of I-95. Maine people are generally known for having great work ethic but when it comes to road work it sure does not show. A dollar spent in Maine just is not buying the same road work as a dollar spent elsewhere.

Jay's picture

I know which way I am

I know which way I am voting. Spending all around needs to be cut back. I've had to cut back on my budget due to this recession, government should have to as well. It's rediculous it costs me $100+ to register a car that is over 10 yrs old with 200k + miles.

tron's picture

And if the referendum passes

And if the referendum passes you will still be paying over $100 to register your car. This only affect newer cars. That's the gotcha, you think it's going to help you, but in reality it is only going to help people who have newer cars. If you can afford an new car, then pay the tax. If you can only afford a clunker, then you should not have to drive on broken roads so the Caddy owner can buy a newer car all the time.

Robert61's picture

tron, sounds like nothing

tron, sounds like nothing but jealousy from a man who has no vehicle...

tron's picture

only sounds that way to

only sounds that way to people with no compassion, integrity or common sense.

Robert61's picture

then why worry about it? You

then why worry about it? You don;t pay excise tax or Property taxes, you've got it made letting people like me pay taxes so you can sit around and blog...nice...

tron's picture

From that statement we can

From that statement we can infer you lack all three. Plus that you are a liar!

dman101's picture

where does the money go sure

where does the money go sure isnt 4 roads i live on willow circle the has been coming apart 4 years big holes in it the city knows about it an has done nothing we have a covert that was put in 5 years ago that is higher than the road water goes around it u think it would b fixed no money will be spend 2 sand an salt road on a daily bacis roads that were find got paved an scew the bad ones it took over 3 months 4 them 2 fix a section of road that got washed out in junes rain storm tax money goes 4 those extra guy that stand around over a holes on overtime

Jay Bee's picture

How else are we to keep

How else are we to keep roads from falling apart? Endless stimulus?

I really don't care HOW we fund the things we use every day, but places like the Heritage Foundation don't care about that. They just want to tear down the country. If they hadn't wrapped themselves so much in the flag, they'd be accused of treason.

Ernest's picture
verified

Take a close look at the

Take a close look at the plates on large fleet commercial vehicles. you will see none registered in "Maine. Even smaller transportation companies have out of state addresses on their trucks. Why to avoid the excise tax every year. Remember when after five years the excise tax dropped to almost nothing. Try registering a 10 year old luxery vehicle and see what the excise tax on it is. The tax used to be on the current value it is now figured on the original cost. It's time to change the law and put local, state and federal government on a reduced budget.

tron's picture

the only people who will win

the only people who will win are those people who buy new cars every year, and businesses who buy vehicles for their fleets. The losers will be everyone who drives, when cities are unable to fix roads. So another tax break for the rich and businesses. Republicans should be tarred and feathered for even thinking about this. Time to disband the Maine Heritage Foundation, they are the worse thing that has ever happened to this state.

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