GOP wants governor to rethink gas tax hike> Lawmakers propose state funding changes

AUGUSTA — State House Republicans were urging Gov. Angus S. King to consider options to raising the gasoline tax Wednesday — including one that would discontinue funding the Maine State Police under the Department of Transportation.

The GOP also maintained that $60,000 in annual charter air service costs for the governor paid under the state Highway Fund should be shifted to the General Fund. House Minority Leader Tom Murphy of Kennebunkport said if the governor moved those costs out, along with $19 million budgeted annually for the Maine State Police, he could save the Highway Fund more than $38 million over the state’s two-year budget cycle.

But administration officials said Murphy was simply wrong about how the governor’s airfare is funded. At King’s request, the practice of funding air expenses under the DOT was discontinued two years ago, according to Dennis Bailey, the governor’s communications director. Bailey also said the administration had made great strides in reducing reliance on the Highway Fund for Maine State Police expenses and challenged Republicans to come up with a viable alternative for the annual $19 million allocation.

“We’d like to do more, but you’ve got to come up with $19 million somewhere,” he said. “There’s prices to pay on all this stuff. There’s pluses and minuses.”

Murphy’s remarks were made in response to signals sent last week from the governor’s office indicating the administration is giving serious consideration to a 5-cent increase to the 19-cent-per-gallon gasoline tax. During the next budget cycle, the Highway Fund faces a projected $55 million shortfall stemming in part from nontransportation expenditures and earlier revenue diversions from the account.

Since state funds can be used to leverage four times that amount in federal highway funding, King is particularly concerned over the potential forfeiture of nearly $200 million in matching funds if the anticipated shortfall isn’t corrected. But he was also cautious about proposing a 5-cent hike in the gas tax, which Republicans maintained would be borne by rural Maine residents who frequently travel many miles to obtain goods and services.

The governor said gasoline tax revenues have become stagnant in recent years because of advances made in automobile fuel efficiency. In fact, King said statistical data actually indicates Mainers are driving more miles annually and using less gas. While the governor is not anxious to raise gas taxes, he pointed out last week that Maine’s 19-cent-per-gallon tax is four cents lower than the New England average.

Any increase in the gasoline tax would require the approval of the 119th Legislature. Leaders in the Senate and the House have split along party lines, with minority Republicans roundly condemning any possible increase and majority Democrats assuming a more open-minded position on the prospect.

Murphy said King should strongly consider the implications of any decision to raise the gas tax — particularly in the face of unkept promises by the Legislature and the governor’s office. Two cents of the 19-cent gas tax was added in as the result of the 1991 “temporary tax package” imposed during the recession by Gov. John R. McKernan and the 115th Legislature. That temporary tax was supposed to be lifted in 1993, but remained in force due to economic necessity.

“Simply tacking five cents [or any amount] on top of the current 19-cent-per-gallon tax is a de facto admission this promise will never be kept,” Murphy said in a prepared statement. “And it should be a long, long time before Mainers again believe the Legislature or a governor who comes to them promoting a tax package meant to `get us over the hump.”‘

Murphy also said any increase would be disproportionately carried by rural Maine residents and the boost would make Maine goods less competitive because of increased transportation costs. Alternately, he added, goods sold in-state would also reflect those adjusted costs.

Bailey said if the state is unable to get the $200 million federal match because of the shortfall, the impact would be felt by towns across the state in the form of local road assistance.

“The local communities are simply going to raise their taxes to pay for road upkeep, so it’s not a guarantee that if we don’t raise the gas tax, these local communities won’t see their taxes go up to pay for roads,” he said.

In response to Murphy’s observation regarding increased costs, Bailey said Maine already holds the distinction of imposing the lowest gas tax in New England and an increase would simply bring the state into line with its neighbors.

“But people shouldn’t think that the governor is sold on this,” Bailey said. “He’s thinking about it, but he hasn’t signed on.”