Maine business and municipal leaders urge state lawmakers to sustain the gas tax supporting critical infrastructure
Suspending Maine’s gas tax: Good intentions, but a bad idea
Earlier this week, the Maine State Chamber of Commerce, Maine Better Transportation Association, Associated General Contractors of Maine (AGC Maine), and the Maine Municipal Association released a statement urging state lawmakers to sustain Maine’s gas tax. The statement was in response to a legislative proposal put forth to institute a nine-month gas tax holiday, which would cost the State Highway Fund $173 million.
“This proposal means well but it won’t work,” said Maria Fuentes, executive director of Maine Better Transportation Association. “User fees such as those paid at the pump fund the lion’s share of fixing our roads, and we know Maine voters support transportation whenever it is on the ballot. We count on these revenues to match critical federal funds.”
Fuentes added, “Maine ranks seventh in the nation for the most bridges in poor condition, and our pavement consistently ranks poorly compared to other states. We need safe bridges and good roads, and this proposal would just put us further behind.”
In 2020, Maine’s Blue-Ribbon Commission on Transportation found the system’s unmet capital need to be $330 million annually. The fuel tax revenue in Maine is currently estimated to bring in approximately $230 million per year. Today, fuel tax revenues provide two-thirds of state highway fund revenues and $11 million in local road assistance. Additionally, while other fees and costs have increased over the years, Maine’s gas tax of 30-cents per gallon has not changed since 2011 and is not indexed to inflation.
Gas tax funds allow MaineDOT to maintain and operate the system we have, including conducting critical operations like snow fighting, pothole patching, and Light Capital Paving of over half of the state’s roads that are often in the worst condition - over 700 miles per year.
While the direct impact on infrastructure is clear, according to MaineDOT, the savings to individual Mainers for someone who travels 20,000 miles per year and drives a car with 25 mpg would be approximately $20 a month during a state gas tax holiday. Suspending the gas tax also means Maine would not capture the gas tax from visitors during the peak summer season.
Matt Marks, CEO of AGC Maine, said, “We understand the inclination to provide additional relief to Mainers right now. The gas tax is a user fee that provides consistent resources to repair our critical roads and bridges. We cannot afford to take a giant step back, and that’s evident from the current pothole season.”
Maine State Chamber of Commerce President and CEO Dana Connors said, “In a rural state, there is no question we are entirely dependent on our roads and bridges, and we appreciate the intent of this proposal, which acknowledges that citizens, businesses, and communities are being hit with much higher costs due to fuel prices and to inflation.” Connors added, “As a former commissioner of MaineDOT, I also know that our businesses count on the annual maintenance and upkeep to our transportation infrastructure. Our concern is that the revenue loss that would occur from suspending Maine’s gas tax would upend operations that Mainers expect, including the tremendous effort to maintain our roads during inclement weather, making this a safety issue. Gas prices fluctuate even in the best of times, and there is no guarantee that prices won’t go back up, absent the fuel taxes.”
Maine Municipal Association legislative advocate Rebecca Graham noted: “Our roads swell with an estimated 35 million visitors every summer and fuel tax revenue is the only contribution those visitors make to funding mechanisms that support road maintenance and repair. With criminal justice reform efforts focused on further disincentivizing registration renewal by hindering police enforcement underway, the combination will likely mean road budgets will further turn to property tax increases to fill the fill the gap.”
“Maine has a budget surplus and can provide direct relief to citizens without jeopardizing a mechanism that provides essential services to residents,” added AGC’s Marks. “The Appropriations and Financial Affairs Committee will be considering tax refunds in their current budget debate.”
“MaineDOT has a three-year work plan, and we encourage lawmakers to consider the impacts on planning if a decision is made to suspend funding. The backlog continues to build and fuel tax revenues are used to leverage federal matching funds. Lawmakers have other options to provide rebates to citizens,” Fuentes said.
For more information, please contact Maria Fuentes at MBTA (207-592-0227; firstname.lastname@example.org), Dana Connors at the Maine State Chamber (207-623-4568; email@example.com), Matt Marks at AGC Maine (207-530-3001; firstname.lastname@example.org), or Rebecca Graham at Maine Municipal Association (207-623-8428; RGraham@memun.org).