AUGUSTA — A bill that would change where utilities pay excise taxes on their fleets of vehicles, which could cost the city of Augusta up to $250,000 a year in revenue, is back before the Legislature.
What essentially was the same bill prompted heated debate, accusations of corporate retribution, and a rift between the city and Central Maine Power Co. before it was rejected on the Senate floor in the Legislature’s last session.
Now it’s back as L.D. 514, sponsored by Rep. Andrew Buckland, R-Farmington, a freshman legislator who took the seat previously occupied by former Farmington Rep. Lance Harvell, who was the earlier bill’s sponsor.
The bill would change where utilities pay excise taxes on their vehicles, from the municipality in which their headquarters are located to the municipality where their vehicles are parked overnight. As of last year, CMP parked vehicles in Fairfield, Farmington, Skowhegan and Portland.
Unlike Harvell last session, Buckland said CMP officials did not ask him to sponsor the legislation. Buckland said recently he had not even talked to CMP’s lobbyist about the bill, and he sponsored it simply because he thinks it proposes a fairer way for excise taxes to be paid and would be good for his constituents. That’s particularly true in Farmington, where CMP keeps about 20 vehicles but does not pay excise taxes on them there.
“I think it’s a fairness issue,” Buckland said. “Now only 24 percent of CMP’s vehicles are parked in Augusta, yet Augusta gets 100 percent of that excise revenue. One reason I think it is worth taking another look at is the disparity still exists, and it’s costing towns excise taxes that could be really helpful in town budgets.”
But what would be good for Farmington would be very bad for Augusta, city officials said. Under current law, CMP pays about $283,000 a year in excise tax on 489 company vehicles to Augusta, which is the home to CMP’s state headquarters.
Ralph St. Pierre, Augusta’s finance director and assistant city manager, estimated that if CMP pays excise taxes on vehicles kept outside Augusta to the municipalities where they are parked, the city would lose $200,000 to $250,000 a year. He said that would amount to a nearly 1 percent increase in property taxes.
Sen. Roger Katz, R-Augusta, said he has discussed the bill with Buckland, and he understands Buckland’s perspective because Farmington, which Buckland represents and where he is a selectman, would benefit from the change.
St. Pierre said Farmington probably would get about $11,000 in additional excise tax revenue on CMP vehicles kept there if the law changes.
CMP officials did not return calls or emails seeking comment.
City officials and the bill sponsor, Buckland, hinted they might be open to a compromise on the bill in which the change is phased in over an undetermined time period to make the effect on municipalities such as Augusta more gradual, instead of taking a huge revenue hit all at once.
St. Pierre said if the change must be made, it might make sense to phase it in gradually, changing where utility company vehicles are registered as they are replaced with new vehicles.
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