Increasing Maine’s gasoline tax for inflation is controversial, not because it is unsound policy, but because gasoline costs too much. When gas was cheap, the increase was largely unnoticed.

With gasoline a dearer commodity, indexing is under scrutiny. But this inquiry obscures a more crucial question: What happens to Maine’s transportation infrastructure if gasoline sales keep falling?

In fact, preserving indexing might soften the coming blow to transportation funding.

Maine Revenue Services reports gasoline consumption – according to data derived from Highway Fund revenues – is plummeting at its fastest rate in 15 years.

For the fiscal year just ended, Maine gasoline sales fell 3.5 percent. This might not sound like much, until actual gallons are tallied. Drivers bought 682.5 million gallons in Maine from July 2006 through June 2007.

Some 658.6 million gallons were sold from July 2007 through June 2008, a decline of 23.9 million. (Final reports on tax revenue from gasoline will be released later, according to the agency.)

Gas consumption has dropped steadily for several years – 1.1 percent in 2005-2006 and 2006-2007, according to MRS data. Last year’s plunge accelerated an already disconcerting trend.

But enough wonkish stuff. Debate over indexing circles around whether Maine should increase the tax (therefore the price) of an unleaded commodity automatically, when this unleaded commodity’s price is sky-high.

The answer is yes.

While this won’t make irritable taxpayers or drivers happy, it is the soundest policy.

Here’s why. Untying Maine’s transportation funding from inflation would exacerbate transportation funding problems from declining consumption. Under no circumstances can Maine make needed infrastructure improvements or investments with fewer gasoline gallons being purchased, or lower levies per-gallon.

It’s imprudent to make a bad situation worse by removing an increase only now objectionable because of price, not policy.

On July 1, indexing increased a gallon of gasoline in Maine by eight tenths of a cent. Debate about whether this practice should continue is worth about as much.

How Maine supports infrastructure with shrinking revenues is much more important to consider.


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.