State gas tax likely to increase

AUGUSTA – Maine motorists may have to pay another 21/2 cents per gallon at the gas pump as of July 1.

A $594 million, two-year state highway budget that received final House approval Tuesday factors in inflation-based increases in gasoline and diesel fuel taxes.

The budget, approved by a 119-18 House vote after no debate, is expected to win final Senate approval Wednesday, said Sen. Pamela Hatch, who co-chairs the Transportation Committee.

The House action came a day after Gov. John E. Baldacci outlined a two-year, $622 million state transportation plan calling for rebuilding and repaving thousands of miles of highways among other rail, airport, seaport, public transit and trail projects.

Supporters of the transportation budget emphasized Tuesday that enactment of the full highway budget, along with authorization of a proposed $75 million bond issue, are critical to full funding of the two-year transportation plan.

Without such action, a large chunk of the federal matching funds for the transportation projects would be denied.

“Transportation issues in this state are really economic issues,” said Hatch, D-Skowhegan.

The highway budget, funded to a large degree by fuel taxes, covers state expenses for highways, state police, motor vehicles and other transportation-related services. It is separate from the general fund budget, which covers social services, education and numerous other nontransportation expenses.

Like the general fund budget, the highway budget reflects a weakened economy and includes some cutbacks. In the Public Safety Department, which includes state police, 18 positions are to be cut, Hatch said.

Also to save money, troopers’ cruisers are to be replaced at 100,000 miles rather than 80,000, the senator said.

The increase in gasoline and diesel fuel taxes would come about as a result of action taken last spring by the Legislature, which decided to tie fuel tax adjustments to the Consumer Price Index.

Before any inflation-based tax increase, however, lawmakers must vote on whether such changes would occur. Separate legislation still pending seeks to do away with the automatic tax increases.

Last year’s legislation projected increases in the range of what’s anticipated in the highway budget now before lawmakers. Gasoline and diesel fuel would increase by 21/2 cents as of July 1, and another half-penny as of July 1, 2004.

The current tax is 22 cents per gallon of gasoline and 23 cents for diesel fuel.

Even if fuel taxes rise July 1, the taxes will still only be at 1999 levels, according to state Department of Transportation officials.

Based on figures showing that the average Maine motorist burns 600 gallons of fuel per year, the tax increase is roughly equivalent to the cost of an oil change, the DOT says.