Maine Auto Excise Tax Repeal, Question 2 (2009)
The Maine Auto Excise Tax Repeal Initiative, also known as Question 2, was on the November 3, 2009 ballot in Maine as an indirect initiated state statute, where it was defeated. The measure would have cut the car excise tax in half, eliminating the sales tax and first three years of car excise tax if you bought a new hybrid vehicle or any other vehicle that got over 40 mpg. It was argued that it would save drivers across Maine somewhere between $70-$88 million per year, and correspondingly reduce the budget of any municipalities in the state that derived part of their annual revenues from collecting the current excise tax. The excise tax, first created in 1929, had been amended only once in state history. The new law was scheduled to take effect in 2010, if it had been approved.
|Maine Question 2 (2009)|
Text of measure
The language appeared on the ballot as:
The following summary was provided in the Maine Citizen's Guide to the Referendum Election:
This bill decreases the excise tax imposed on motor vehicles for the first year from 24 mills to 12 mills, for the 2nd year from 17 1/2 mills to 8 mills and for the 3rd year from 13 1/2 mills to 4 mills and imposes a 4 mills rate for the 4th and succeeding years. This bill also exempts from the excise tax imposed on motor vehicles the first 3 model years of a hybrid gasoline-electric vehicle, a fuel-cell-fueled or hydrogen-fueled vehicle or a highly energy efficient vehicle that has a highway fuel economy estimate of at least 40 miles to the gallon. After the first 3 years, the rate of excise tax is the same as on other motor vehicles of the same age.
This bill also exempts from the sales tax 100% of the sale or lease price of a new hybrid gasoline-electric vehicle, a fuel-cell-fueled or hydrogen-fueled vehicle or a vehicle with a highway fuel economy estimate of at least 40 miles per gallon. 
Intent and content
The following description of the intent and content of this ballot measure was provided in the Maine Citizen's Guide to the Referendum Election:
This initiated legislation would reduce the rate of the excise tax on motor vehicles less than six years old. This is the tax that owners of vehicles pay each year in order to register their vehicles. The excise tax is collected and retained by the city or town where the owner of the vehicle resides. If the vehicle owner lives in the unorganized territory, the tax is deposited in the unorganized territory fund in the county where the owner resides.
The extent of the rate cut varies depending on the age of the vehicle. The legislation provides a rate cut of about 50% for one and two-year old vehicles (from 24 mills to 12 mills in year one, and 17 ½ to 8 mills in year two); 70% for a 3-year old vehicle (from 13 ½ to 4 mills); 60% for a 4-year old vehicle (from 10 to 4 mills); and 38% for a 5-year old vehicle (from 6 ½ to 4 mills). The legislation does not change the current rate of excise tax (4 mills) for vehicles older than 5 years. Each mill constitutes a tax of one dollar for every $1,000 of the manufacturer’s suggested retail price for the vehicle. (For example, a 4-mill tax rate means that the vehicle owner would pay a tax of $4 for every $1,000 of the suggested retail price for that vehicle.)
Hybrid gasoline-electric vehicles, vehicles powered by fuel cells or hydrogen, and other vehicles with estimated fuel consumption rates of at least 40 miles per gallon on the highway according to United States Environmental Protection Agency testing, would be entirely exempt from excise tax during the first three years. After three years, the tax rate would be the same as for all other motor vehicles of the same age. These vehicles also would be completely exempt from sales tax.
If approved, this citizen initiated legislation would take effect 30 days after proclamation of the vote.
A “YES” vote favors enactment of the initiated legislation.
A “NO” vote opposes enactment of the initiated legislation. 
The following fiscal impact statement was provided in the Maine Citizen's Guide to the Referendum Election:
Fiscal Notes and Detail. The implementation of this initiated bill is contingent upon approval by the voters at referendum in November of 2009. If adopted, it will exempt from sales and use tax the sale or lease price of a new hybrid gasoline-electric vehicle, a fuel-cell-fueled or hydrogen-fueled vehicle or a vehicle with fuel economy of at least 40 miles per gallon effective January 1, 2010. The exemption from sales and use tax will reduce General Fund revenue by $2,417,512 in fiscal year 2009-10 and $4,835,025 in fiscal year 2010-11. This exemption will also reduce Local Government Fund revenue by $127,238 in fiscal year 2009-10 and $254,475 in fiscal year 2010-11.
This bill also proposes to reduce the excise tax imposed on certain motor vehicles. This would result in a reduction in General Fund revenues of $71,028 in fiscal year 2009-10 and $142,057 in fiscal year 2010-11. It would also reduce Other Special Revenue Funds revenue by $792,977 in fiscal year 2009-10 and $1,585,955 in fiscal year 2010-11 for excise tax collected through the International Registration Plan. Since these revenues are used to reimburse municipalities through the Municipal Excise Tax Reimbursement program, reimbursements to municipalities would be reduced by $316,012 in fiscal year 2009-10 and $632,025 in fiscal year 2010-11. Any remaining revenues collected through the International Registration Plan are transferred to the Highway Fund. Accordingly, Highway Fund revenue would decrease by $476,965 in fiscal year 2009-10 and $953,930 in fiscal year 2010-11.
The bill would decrease excise tax revenue to municipalities beginning in January 2010 by an estimated $83.2 million annually. Based on data from the Secretary of State, Bureau of Motor Vehicles and Maine Revenue Services, these changes would reduce municipal motor vehicles excise taxes by 40%. Total municipal motor vehicle excise tax revenue in calendar year 2006 as reported to Maine Revenue Services was $207.9 million.
—Office of Fiscal and Program Review, 
Maine Municipal Association impact statement
According to the Maine Municipal Association the impact of the repeal of the auto excise tax was estimated to be a reduction of tax revenues by approximately 40%. However, in the state's capital, Augusta, officials estimated a 50% reduction or $1.5 million less in annual revenue. City Manager William Bridgeo said the impact in Augusta would be greater because "we're the location of a number of fleets. And they tended to replace their vehicles on a more aggressive basis."
The proposal was drafted by the Maine Heritage Policy Center. However, Maine Leads helped collect more than 700,000 signatures in order to qualify the proposal to be presented before the Maine Legislature. Chris Cinquemani, of the Maine Heritage Policy Center, said their proposal would "put money back into people's pockets." More Green Now is the official campaign supporting the excise tax cut. The National Taxpayers Union and a coalition of taxpayers and policy advocates also supported the Maine Auto Excise Tax Repeal.
- Stimulate conversation about excise tax fairness
- Reduce auto excise taxes by about 50%
- Provide about $80 million in savings
- Provide tax breaks for new hybrid or energy efficient vehicles
- Promote cleaner air and fuel efficiency
In a September report, Martin Sheehan of the Maine Heritage Policy Center said,"The auto excise tax is the most hated tax in the state of Maine." The main problem with the tax is that the tax is based on the sticker price of the vehicle and not the purchase price. According to Sheehan the measure would not affect the sticker price but it would cut the amount car buyers pay.
Chairman of the More Green Now Campaign, Chris Cinquemani said,"Maine's excise tax is the seventh highest in the nation. And 22 other states pay no excise tax at all. So here we have another example of Maine leading the pack when it comes to tax burden."
According to the National Taxpayers Union Question 2 would reduce vehicle taxes on the vast majority of Mainers, saving millions of dollars. The measure would lower taxes and limit government. The measure was included in the NTU's 2009 General Election Ballot Guide.
Opponents of Question 2 included: Kay Rand, a Maine lobbyist, various local government officials and the Maine Can Do Better. According to Ellen Sanborn, finance director of Portland, Maine, if approved Question 2 would negatively affect local governments. Sanborn said,"That's a big cut, and we don't have a good way to make it up with other revenues, which also are in decline." The tax cut would reduce the city's revenues by about $3.8 million, said Sanborn.
Individual groups that opposed the measure included, according to Maine Can Do Better:
- Portland Education Association
- Maine Education Association
- Citizens Unified for Maine’s Future
- American Associations of Retired Persons (AARP)
- American Council of Engineering Companies - Maine (ACEC-ME)
- Associated General Contractors - Maine (AGC-ME)
- American Society of Civil Engineers - Maine (ASCE-ME)
- Bangor Area Homeless Shelter
- Citizens Who Support Maine Public Schools
...view all opponents here.
- hurt local governments
- force Maine residents to cover road work expenses while providing for tax breaks for new and hybrid vehicles
- eliminate funding for road and bridge maintenance
Additionally, opponents argued that if the measure was approved, the repeal would increase property taxes and reduce services throughout the state because the state would have to compensate for eliminated revenue. York Chairman Mike Estes argued that now is not the time to eliminate the tax.
In September 2009 the Maine Municipal Association presented several arguments against the excise tax: the tax, they said, would result in the loss of revenues for towns and cities and that the cuts will benefit relatively few motorists. According to Jeff Austin, a legislative advocate with MMA, the excise tax generates $205 million for local communities."This is the second largest source of municipal — what we call ‘own-source’ — revenue after the real estate tax," said Austin.
$87,171 was reported to have been contributed to campaigns relating to the support of Question 2. However, some of the contributions were to groups supporting or opposing multiple campaigns, so an exact donation figure for the measure cannot be calculated.
Below is a chart that outlines major cash contributions to the Yes on Question 2 campaign, as of October 2009:
|Maine Heritage Policy Center||$29,745.20|
|More Green Now||$6,181.00|
- According to a October 13, 2009 report More Green Now reported a total of $6,181.00 in contributions and $6,095.80 in expenditures.
$3,250,259 was reported to have been contributed to campaigns relating to the opposition of Question 2. However, some of the contributions were to groups supporting or opposing multiple campaigns, so an exact donation figure for the measure cannot be calculated.
Below is a chart that outlines major cash contributions to the No on Question 2 campaign , as of October 2009:
|Citizens Who Support Maine's Public Schools||$350,000|
|Maine Center for Economic Policy||$4,251.95|
|Maine People's Resource Center||$25,000|
|Citizens United for Maine's Future||$659,250.00|
- Citizens United for Maine's Future reported total funding of $659,250. They are listed as contributors to both the opposition of Question 2 and Question 4, also known as TABOR II.
- According to the October 2009 reports, Citizens Who Support Maine's Public Schools received a donation from the National Education Association for $350,000.
Media editorial positions
- Main article: Endorsements of Maine ballot measures, 2009
Editorial boards in support
- The Kennebec Journal/Morning Sentinel supported Question 2. In an editorial, the board said, "Question 2's sponsors rightly point out that there is another option: Find economies in other spending categories and transfer money from those accounts to roads and bridges. Lowering the tax also could spur communities to increase their efforts to find cooperative ways to save money in joint efforts, which would be a positive result all by itself."
Editorial boards opposed
- The Bangor Daily News opposed Question 2. In an editorial they said, "Because the excise tax revenue is generally used to pay for municipal road and bridge maintenance and repair, cutting the tax would result in worse roads or an increase in property taxes, the only other source of revenue controlled by local government. While encouraging the purchase of hybrid and fuel-efficient vehicles is laudable, this portion of the referendum question comes off as an afterthought."
- The Sun Journal opposed the auto excise tax repeal. In an editorial they said,"Cutting the excise tax like this would be worse than leaving it intact. Here's why: A tax shift will happen. It's unavoidable. Cutting the excise tax will be felt on property taxes, as municipal governments have few places to raise revenue. The money must come from somewhere; that somewhere will be owners of homes and commercial property."
- The Seacoast Media Group opposed Question 2. They said,"This is a penny-wise and pound-foolish initiative if ever there were one. It sounds great on its face: if you buy a car up to six years-old, your excise tax would be slashed by an average of 55 percent, and you'd pay no excise tax for three years on a hybrid or fuel-efficient car. But the ramifications of this are manifold. Towns will lose those funds from all those new cars — nearly $500,000 in York."
- The Brunswick Times Record opposed Question 2. They said,"The proposal is bad tax policy masquerading as a "green" initiative that will slash by 40 percent a revenue source that historically has funded 90 percent of the coast of repairing local roads and bridges throughout Maine."
- The Journal Tribune opposed Question 2. They said,"Although there is no legal requirement for excise tax revenue to be used on roads, the money for maintaining local roads comes primarily from two sources: Excise tax revenue and state aid. And road maintenance is expensive...Since frugality is a Maine virtue, it is worth noting that the tax break proposed in Question 2 would provide nothing to the 68 percent of Mainers who own vehicles that are six years old and older. The present excise tax may not be perfect, but it’s fairer than the alternative on this year’s ballot."
Path to the ballot
The filing deadline for the November ballot was January 22, 2009. The number of valid signatures required is 55,087 (10% of the total votes cast for Governor at the November 7, 2006 election).
Slightly over 70,000 signatures were submitted, and sponsors qualified for a ballot slot.
- See also: Polls, 2009 ballot measures
- A poll released October 27, 2009 by Pan Atlantic SMS Services revealed that 29% of voters are in favor of Question 2, whereas 61% are opposed and 11% are undecided. Approximately 400 voters were polled. The poll is reported to have a +/- 4.9% margin of error.
- A poll conducted from September 30 - October 7 by Pan Atlantic SMS Services revealed that 48% of voters are in favor of Question 2, whereas 48% are opposed and 6% are undecided.
|Date of Poll||Pollster||In favor||Opposed||Undecided|
|Sept. 30 - Oct. 7||Pan Atlantic SMS Services||48%||46%||6%|
|Oct. 20 - 22||Pan Atlantic SMS Services||29%||61%||11%|
- Maine 2009 ballot measures
- 2009 ballot measures
- List of Maine ballot measures
- History of Initiative & Referendum in Maine
- Education Week, "Education Issues Bidding for Voters' Attention," October 26, 2009
- Scarborough Leader, "Worry over excise tax question," October 22, 2009 (timed out)
- The Maine Campus, "Question 2 aims to reduce excise tax," October 22, 2009
- WMTW, "In Depth: Question 2 Could Change Excise Tax," October 20, 2009
- Bangor Daily News, "Question 2 tackles car tax, but at what cost?," October 13, 2009
- Seacoast Online, "Question 2 in Maine would reduce excise tax," October 11, 2009
- Associated Press, "Anti-tax Fever Coming Back To Maine Ballots Nov. 3," October 11, 2009
- Sanford News, "Sanford council to present views on excise tax, TABOR II questions," October 1, 2009
- Portland Press Herald, "Cutting excise tax: Could it backfire?," January 26, 2009
- Maine Secretary of State, Division of Elections, "Maine Citizen's Guide to the Referendum Election, Tuesday, November 3, 2009," accessed May 9, 2014
- Maine Secretary of State, Elections Division, "Referendum Election Tabulations, November 3, 2009," accessed May 9, 2014
- Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
- Kennebec Journal, "City views excise tax effect," September 30, 2009
- Bangor Daily News, "Battle brewing over bill to reform Maine’s excise tax," June 12, 2009
- Portland Press Herald, "Anti-TABOR forces attract more cash but trail in polls," October 16, 2009
- More Green Now, "Auto Excise Tax Repeal," accessed September 8, 2009
- Sea Coast Online, "Maine excise tax reform could slash town budgets," September 23, 2009
- WABI, "Excise Tax Forum," September 22, 2009
- Morning Sentinel, "Excise tax initiative borders on madness," February 5, 2009
- Maine Can Do Better, "Sponsors," accessed September 22, 2009
- Portland Education Association, "Excise Tax," accessed September 14, 2009 (dead link)
- Bangor Daily News, "Groups criticize excise tax cut, TABOR II," September 24, 2009
- Follow the Money, " Maine 2009 Question 2," accessed May 9, 2014
- State of Maine, "Cash Contributions to PAC," October 13, 2009
- State of Maine, "Campaign Finance Summary," October 13, 2009
- State of Maine, "Cash Contributions to PAC," October 13, 2009
- Morning Sentinel, "Auto excise tax could stand to be trimmed," October 25, 2009
- Bangor Daily News, "No on Question 2," October 21, 2009
- Sun Journal, "Question 2: Cut is worse than the tax," October 19, 2009
- Seacoast Media Group, "Our take on state ballot questions," October 28, 2009
- The Brunswick Record,"‘No’ on Question 2," October 28, 2009 (dead link)
- Journal Tribune, "Question 2: A threat to local roads and budgets," October 20, 2009
- Keep Maine Current, "Excise tax vote could pinch town budgets," February 19, 2009
- Maine Public Broadcasting Network, "Poll Finds Waning Support for TABOR 2," October 26, 2009
- Sun Journal, "New poll shows Mainers support gay marriage, TABOR," October 15, 2009
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