MDOT Eyes Hybrid and Electric Vehicle Owners to Help Fill Depleted Roadway Coffers

Apr 21, 2017

AUGUSTA, Maine - A proposal by the Maine Department of Transportation to generate more money for roads and bridges is receiving a mixed reaction by lawmakers and municipalities.

The bill imposes annual fees on hybrid and electric vehicles, while also diverting excise taxes on tractor trailers from cities and towns to the state highway fund.

The proposal would also compel municipalities to spend motor vehicle excise tax collections only on local transportation projects.

Republican Sen. Ron Collins sponsors the bill. He said taxes on vehicles should be spent on the roads they drive on. "The excise tax that's collected on motor vehicles is being diverted into the General Fund. There's no earmark for it on the local basis."

But the proposal is opposed by the Maine Municipal Association, which represents more than 400 municipalities. According to the MMA, an excise tax dedicated to transportation projects would hammer rural towns with few roads that also depend on excise tax collections to keep property taxes down.

The MMA said taking the excise tax for tractor trailers would deal an $8 million hit to cities and towns.

The proposal is one of several designed to bolster the Maine Department of Transportation, which is attempting to deal with the $160 million annual shortage of funds for maintenance projects. The LePage administration has already proposed transferring most of the costs for the Maine State Police from the highway fund to the General Fund. The swap could generate $20 million in transportation funding a year, but it will blow an equal size hole in the state's General Fund budget.

The Transportation Committee has endorsed that proposal, but it has yet to clear the budget writing committee.

Last year, the American Society of Civil Engineers gave the state’s infrastructure an overall grade of C-. That included a D grade for Maine’s 23,000 miles of roads, about 37 percent of which are the responsibility of the state.

According to the MDOT, 1 out of 7 bridges are “structurally deficient,” meaning they’re falling apart. Nearly 1 in 5 is at least 80 years old.

The highway fund, which pays for construction and repair of roads and bridges, is primarily supplied by Maine’s tax on gasoline or diesel fuel. But the emergence of more efficient cars, hybrid vehicles and electric cars has depleted revenues.

Lawmakers have responded with several bills, including one by Rep. Wayne Parry that would direct sales tax revenues from cars and trucks into the highway fund. Parry says the bill will generate an estimated $120 million in revenue.

Gorham Democrat Andrew McLean is a co-sponsor of Parry’s bill, but has drafted a different bill that diverts some auto sales tax revenue to the highway fund, but also boosts the gas tax and possibly some other vehicle related fees, too.

The MDOT proposal reviewed by the Transportation Committee also includes applying an $250 annual fee on hybrid vehicles and a $350 annual fee on electric vehicles. Supporters say the provision is designed to offset the loss in gas tax revenue from electric and hybrid cars.

But environmental groups countered that the proposal essentially double-taxes electric and hybrid owners because they still have to register their cars and pay excise tax every year. Such a penalty, they said, would discourage purchasing vehicles that can lower carbon emissions.