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Opponents say Mainers showed their concern that towns would be forced to raise property taxes.

By TUX TURKEL, Staff Writer November 4, 2009

 

A bid to cut Maine's excise tax as a way to force cities and towns to trim spending was defeated by a wide margin Tuesday.

Supporters conceded shortly after 10 p.m., with about 84 percent of precincts reporting and voters rejecting the proposal 74.1 percent to 25.9 percent. They expressed disappointment but said the measure had at least raised questions about the fairness of Maine's excise tax.

"We've now started a conversation that's not been had before," said Chris Cinquemani, a spokesman for the campaign.

Opponents, including many municipal government and business leaders, said the overwhelming rejection showed that Mainers were concerned that cutting the excise tax would have shifted road repair and other costs to property taxes.

"We like to invest in our communities," said Lizzy Reinholt, a spokeswoman for the No on 2 campaign.

Promoted as a populist measure, the tax cut would have applied only to vehicles newer than six years old. But the vast majority of motor vehicles in Maine are older than that, a fact that may have led voters to turn against the proposal.

Supporters of the measure, drafted by the conservative Maine Heritage Policy Center, saw it as another way to pressure town and city governments to tighten their belts.

An unpopular levy, the excise tax was targeted because supporters said it's higher here than in most states and burdensome to lower-income drivers, who must come up with cash before they can put a car on the road. And it's unfair, they said, because it's based on a car's sticker price, not what the buyer actually pays.

Cutting the tax in half, they said, would encourage more people to buy newer vehicles. They tried to broaden the appeal and give the measure a green tint, by exempting hybrid and super fuel-efficient vehicles from both sales tax and three years of excise tax.

But opponents said the measure went too far.

Excise taxes, on average, bring in 40 percent of municipal revenue. That income has already taken a big hit during the recession, as fewer cars are being sold.

The proposed reduction would have forced communities that have already trimmed services to make further cuts, the towns said. They would have to choose, perhaps, between plowing and road maintenance, or raising property taxes.

They also said the tax is only a small fraction of the total cost of buying a new car, so cutting it in half would do little to boost sales.

Extending the break to hybrid vehicles and cars that get at least 40 miles per gallon on the highway was just a "greenwashing" tactic, opponents said. It was a way to make voters think they'd be helping the environment, even though those cars cost more money and make up less than 4 percent of new car sales.

Staff Writer Tux Turkel can be contacted at 791-6462 or tturkel@pressherald.com