Maine Auto Excise Tax Repeal, Question 2 (2009)

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The Maine Auto Excise Tax Repeal, Question 2 will be on the November 3, 2009 ballot in Maine as an initiated state statute. The measure proposes cutting the car excise tax in half, and eliminate the sales tax and first three years of car excise tax if you buy a new hybrid vehicle or any other vehicle that gets over 40 mpg. This would save drivers across Maine somewhere between $70-$88 million per year, and correspondingly reduce the budget of any municipalities in the state that derive part of their annual revenues from collecting the current excise tax.[1]

The excise tax, first created in 1929, has been amended only once in state history. If passed by voters, the new law would take effect in 2010.

Ballot summary

The language that will appear on the ballot is:

Do you want to cut the rate of the municipal excise tax by an average of 55% on motor vehicles less than six years old and exempt hybrid and other alternative-energy and highly fuel-efficient motor vehicles from sales tax and three years of excise tax?[2]

Specific provisions

The proposed bill:

  • Decreases the excise tax imposed on motor vehicles for the first year from 24 mills ($0.001 per each dollar of value) to 12 mills.
  • Decreases the excise tax the 2nd year from 17 1/2 mills to 8 mills.
  • Decreases the excise tax the 3rd year from 13 1/2 mills to 4 mills and imposes a 4 mills rate for the 4th and succeeding years.
  • 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.
  • 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.

Supporters

More Green Now.png

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 will "put money back into people's pockets." More Green Now is the official campaign supporting the excise tax cut.[3] The National Taxpayers Union and a coalition of taxpayers and policy advocates also support the Maine Auto Excise Tax Repeal.[4]

Donors

Below is a chart that outlines major cash contributions to the Yes on Question 2 campaign, as of October 2009:[5]

Contributor Amount
Maine Heritage Policy Center $29,745.20
Maine Leads $14,439.43
More Green Now $6,181.00

Note:

  • 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.[6]

Arguments

According to More Green Now, Question 2 will:[7]

  • 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 does not affect the sticker price but it does cut the amount car buyers pay.[8]

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."[9]

According to the National Taxpayers Union Question 2 would reduce vehicle taxes on the vast majority of Mainers, saving millions of dollars. This measure would lower taxes and limit government. Their 2009 General Election Ballot Guide includes more on upcoming ballot measures.

Opponents

Opponents of Question 2 include: Kay Rand, a Maine lobbyist[10], various local government officials and the Maine Can Do Better. According to Ellen Sanborn, finance director of Portland, Maine, if approved Question 2 will 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 oppose the measure include, according to Maine Can Do Better:[11]

  • Portland Education Association[12]
  • 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.

Donors

Below is a chart that outlines major cash contributions to the No on Question 2 campaign , as of October 2009:[13]

Contributor Amount
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

Note:

  • Citizens United for Maine's Future reported total funding of $659,250. They are listed a 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.

Arguments

According to Maine Can Do Better, Question 2 will:[14]

  • 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 argue that if the measure is approved, the repeal will increase property taxes and reduce services throughout the state because the state will have to compensate for eliminated revenue. York Chairman Mike Estes argues that now is not the time to eliminate the tax.[8]

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.[15]

Paths 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).

Polling information

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.[16]
  • 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.[17]
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%

Impact

According to the Maine Municipal Association the impact of the repeal of the auto excise tax is estimated to be reduction of tax revenues by approximately 40%. However, in the state's capital, Augusta, officials estimate a 50% reduction or $1.5 million less in annual revenue. City Manager William Bridgeo said that the impact in Augusta will be greater because "we're the location of a number of fleets. And they tend to replace their vehicles on a more aggressive basis."[18]

Path to the ballot

Slightly over 70,000 signatures were submitted, and sponsors qualified for a ballot slot.[19]

See also

Articles

Pencil.pngInterviews

External links

Supporters

Opponents

Additional reading

Editorials

Video clips

References

  1. Portland Press Herald, "Cutting excise tax: Could it backfire?", January 26, 2009
  2. Maine Secretary of State,"Upcoming Elections," retrieved September 7, 2009
  3. Bangor Daily News,"Battle brewing over bill to reform Maine’s excise tax," June 12, 2009
  4. Portland Press Herald,"Anti-TABOR forces attract more cash but trail in polls," October 16, 2009
  5. State of Maine,"Cash Contributions to PAC," October 13, 2009
  6. State of Maine,"Campaign Finance Summary," October 13, 2009
  7. More Green Now,"Auto Excise Tax Repeal," retrieved September 8, 2009
  8. 8.0 8.1 Sea Coast Online,"Maine excise tax reform could slash town budgets," September 23, 2009
  9. WABI,"Excise Tax Forum," September 22, 2009
  10. Morning Sentinel, "Excise tax initiative borders on madness", February 5, 2009
  11. Maine Can Do Better,"Sponsors," retrieved September 22, 2009
  12. Portland Education Association,"Excise Tax," retrieved September 14, 2009
  13. State of Maine,"Cash Contributions to PAC," October 13, 2009
  14. Maine Can Do Better,"Auto Excise Tax," retrieved September 8, 2009
  15. Bangor Daily News,"Groups criticize excise tax cut, TABOR II," September 24, 2009
  16. Maine Public Broadcasting Network,"Poll Finds Waning Support for TABOR 2," October 26, 2009
  17. Sun Journal,"New poll shows Mainers support gay marriage, TABOR," October 15, 2009
  18. Kennebec Journal,"City views excise tax effect," September 30, 2009
  19. Keep Maine Current, "Excise tax vote could pinch town budgets", February 19, 2009