NEED WESTBROOK INPUT

Voters in November could have an opportunity to slash car excise taxes by nearly half, a possibility municipal leaders say would likely raise property taxes or lead to even more difficult budget problems.

A citizens’ initiative petition circulated by Maine Leads, a nonpartisan advocacy group based in Augusta, would cut automobile excise taxes by half for the first five years of registration///FOR A NEW VEHICLE?//. Geoff Herman, director of state and federal relations for the Maine Municipal Association, said the first-year rate is now $24 per $1,000 based on the vehicle’s list price. Herman said the proposal would be advantageous to those people buying new vehicles.

Since municipalities retain 100 percent of excise taxes, Gorham Town Manager David Cole has estimated that Gorham would lose about $1 million a year.

“That would be devastating,” he said.

But Chris Cinquemani, director of government relations of Maine Leads, said people are calling for tax relief and efficient governments.

“Doom-and-gloom scenarios are just a way to scare the people,” Cinquemani said.

“It’s a shift to property taxes from excise taxes,” said Buxton Selectman Bob Libby.

The issue has come up at a difficult economic time. Excise taxes have already fallen because fewer people are buying new cars./// Last year, Gorham collected $2.4 million in excise taxes and Buxton collected $1.3 million. ///NEED TO GIVE FIGURES TO MAKE THE COMPARISON. LIKE LAST QUARTER OF 08 COMPARED TO LAST QUARTER OF 07, FOR GORHAM, BUXTON AND WESTBROOK////In Gorham, Cole is keeping close tabs on excise taxes and said they are about on target with projections. “We appear to be holding our own,” Cole said.

Cole said this week excise taxes were down a little in January after being up a little in December. He said neither month provides an indication of a reliable trend.

But the amount of excise taxes collected in Buxton is lower than the town hoped to collect.

“We are down this year because people aren’t buying new cars,” Libby said.//////NOT SURE WHAT TO DO WITH THIS STUFF IF WE GOT THE ACTUAL FIGURES////

Deputy Secretary of State Julie Flynn expects the certification process to be complete by Feb. 23.

“We’re working on certifying names,” Flynn said recently.

The citizens’ initiative needs 55,087 valid signatures. Cinquemani said the petition has more than 70,000 signatures and he’s confident it will meet requirements.

Tom Brown, executive director of the Maine Automobile Dealers Association, said last week the association hadn’t seen language of the excise reduction proposal. Brown said the excise tax is a significant expense for an individual buying a new car, but, he said, the group recognizes the municipalities’ need for revenue.

“There needs to be a balance,” Brown said.

Herman said that the measure, if passed in a November referendum, would go into effect in January 2010. Herman said municipalities would lose 40 percent of their excise tax income.

Herman said a statewide decrease would be $88 million among the 492 communities. “It’s a lot of money to take out of the system,” Herman said.

But Cinquemani said Maine ranks sixth highest among the 27 states in the nation that have excise taxes. “Politicians have failed to create real tax relief people are calling for,” Cinquemani said.

The proposal also encourages environmental reforms, according to Cinquemani. For those purchasing energy-efficient vehicles like hybrids, there would be no excise taxes for three years.

Cole said recently that excise taxes represent Gorham’s second largest source of non-property tax revenue. If the measure to cut excise taxes were enacted, Gorham would lose in excess of $1 million annually, based on current revenue figures, and Buxton would lose $600,000. ///WESTBROOK//

“That’s a hit in these times,” Buxton Selectman Libby said.

An excise tax reduction measure would also hit the state’s budget. Herman said it would impact the state’s treasury because the bill would also eliminate the sales tax on hybrid cars.

Cinquemani said the Maine Heritage Policy Center wrote the language for the citizens’ initiative and Maine Leads spearheaded the drive to collect signatures. The petition was submitted to the secretary of state on Nov. 3.

If the petition has sufficient valid signatures, it would first go to the state Legislature. Flynn said legislators could either pass the measure or send it to referendum.

“I suspect it would go to referendum,” Cole said.

Brown said the current excise tax schedule was put into place decades ago and needs revision. Herman said cars were once subject to personal property taxes in municipalities, but the excise tax enacted by Legislature replaced it in 1929.

Municipalities use the money to build and maintain its local roads and bridges, although the Legislature didn’t mandate how municipalities spend excise tax money. Libby said excise taxes collected go into Buxton’s General Fund and road money is then allocated from it.

If voters favor the referendum, each community would decide how best to handle a reduction in excise tax revenue. Cole said the result in Gorham would mean either increased property taxes or severe cuts in roadwork.

Herman said the amount in excise taxes collected now is equivalent to what is spent for local roads.

“You would have a massive deterioration of the quality of Maine roads,” Herman said.