Gas taxes bill would tie increases to inflation

AUGUSTA – Gasoline and diesel fuel taxes would automatically go up with inflation under a proposed bill that is being pushed for by the state’s top transportation official.

Transportation Commissioner John G. Melrose said the proposal would increase gas taxes at the same rate the Consumer Price Index goes up every year, beginning in 2003. Drivers now pay 22 cents in state taxes per gallon of gas and 23 cents for a gallon of diesel fuel.

Melrose predicted his department will face a $35 million to $40 million shortfall in the 2003-04 biennial Highway Fund budget. If approved, the gas-tax inflation factor would bring in an estimated $15 million during that same period.

But the idea of automatic increases in the gas tax is already facing opposition before it is out of the starting gate.

State Sen. Richard A. Bennett, R-Norway, who will be Senate president during the upcoming legislative session, said the state needs to find ways to cut expenses before it proposes more taxes.

“I wish they had been so creative when they were trying to drive down our throats a gasoline tax a few years ago,” he said. “Now we’re in an economic recession and so now is not the time to increase taxes. Now is the time to tighten our belts.”

But Sen. Kenneth T. Gagnon, D-Waterville, supports the concept – perhaps with a slight adjustment.

Gagnon, who is chairman of the Senate Taxation Committee, questioned the wisdom of allowing annual fuel tax increases to go into effect without the opportunity for a legislative veto.