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Car excise tax: Too high or necessary?

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Car excise tax: Too high or necessary?

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.

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 to Nadeau. In looking to offset the reduction in revenue, officials would likely look at their entire budget, rather than just make corresponding cuts to the road maintenance budget, he 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."

Rebekah Metzler is a staff writer at the Sun Journal in Lewiston. She can be reached at rmetzler@sunjournal.com.