Former Gov. Paul LePage and other Republicans are targeting the gas tax during a record fuel-price surge, but proposed cuts face pushback from groups concerned a short-term revenue loss that could hurt road and bridge funding and shift the burden to other taxes.
It comes as the average price of regular gas in Maine rose to a record of $4.19 on Tuesday, according to AAA. Prices are expected to continue to climb as the Russian invasion of Ukraine limits oil supplies. Gas prices, although not included in the most common inflation measure, have been one of the most visible signs of high prices across the US in recent weeks.
Republican calls to address the gas tax are an attempt at political distinction with Gov. Janet Mills, a Democrat who adapted their calls for giving back half a massive state surplus into a plan to send checks to families. But transportation and business advocates warn that suspending the gas tax could threaten Maine infrastructure or require funding shifts from other sources.
LePage focused on fuel prices in a rare campaign press event in Yarmouth on Tuesday, calling on Mills and the Legislature to temporarily lower the gas tax by at least half. He also called for axing tolls on the Maine Turnpike for “at least 90 days,” pointing to the summer tourism season as a good time to bring it back so out-of-state travelers could bear more of the burden.
“As I travel the state, everyone I meet is worried about food costs, heating, electricity and gasoline,” the former governor said.
LePage targeted fuel taxes early in his tenure as governor, signing a bill in 2011 to end the annual practice of indexing based on inflation. The tax, which used to increase slightly each year, has remained constant at 30 cents per gallon since then, making up a smaller share of Maine’s road and bridge funding in inflation-adjusted dollars.
His calls are likely to go unheeded in the Democratic-controlled Legislature. Top lawmakers have already indicated skepticism of targeting the gas tax, which accounts for most of the state funding for transportation projects, after Rep. Laurel Libby, R-Auburn, introduced a bill to eliminate the tax through the end of 2022. Mills’ office did not rule the idea out on Monday but pointed to the checks plan instead.
But the proposal to reduce or eliminate the gas tax even temporarily encountered broad pushback Tuesday from the Maine State Chamber of Commerce and other groups, citing its effects on transportation funding. Maria Fuentes, executive director of the Maine Better Transportation Association, said proposals targeting the gas tax, “mean well, but won’t work.”
A three-month suspension of the gas tax would cost roughly $57 million, while halting tolls over the same period would likely cost the Maine Turnpike Authority around $36 million, data suggest. Much would be saved by Mainers who would avoid tolls or pay lower prices at the pump, although some would be recuped by out-of-staters. It is a small fraction of the proposed relief checks, which are expected to cost the state just over $600 million.
Toll revenue accounts for nearly all of the funding for maintenance on the Maine Turnpike, while it accounts for a plurality of state funding for Maine Department of Transportation projects. State funding is also necessary to receive certain federal matching funds, Fuentes noted.
A decline in gas tax revenue would require the agency to put off planned work or seek alternative funding sources, such as the general fund or bonds, that would redistribute the cost from road users to taxpayers more broadly. The state is also sitting on a budget surplus of roughly $1.2 billion. Not all the money has been allocated in Mills’ spending plan.
Absent revenue from the gas tax this summer, when Maine sees many out-of-state visitors, cities and towns could turn to greater use of property taxes to fund road maintenance, warned Rebecca Graham, a advocate with the Maine Municipal Association.
“Fuel tax revenue is the only contribution those visitors make to funding mechanisms that support road maintenance and repair,” she said.
BDN writer David Marino Jr. contributed to this report.