Maine panel continues work on highway funding gap solution
January 7, 2020
Work continues in Maine for a state commission tasked with reaching agreement on how to address a highway funding gap estimated to be as much as $230 million annually.
The Blue Ribbon Commission to Study and Recommend Funding Solutions was formed last summer to discuss and ultimately recommend how to cover the funding gap. The group comprised of government officials and industry experts was expected to write a report that includes recommendations for the beginning of the regular session that begins Wednesday, Jan. 8.
Currently, the state relies on annually borrowing to cover the highway budget. During the past 12 years, voters have approved transportation bond issues nine times with a combined total of $778 million.
Panel members are hopeful to find a better way to address funding needs.
The panel has discussed funding gap options that include a fuel tax increase. Currently, the state collects a 30-cent excise tax on gas. The diesel tax is 31 cents.
Rep. Andrew McLean, D-Gorham, is among the group appointed to the commission. He backs a plan to raise the fuel tax by 6 cents to 37 cents per gallon.
The increase is estimated to fill about 20% of the funding gap – $45 million.
Republicans, however, say they are reluctant to boost fuel rates unless the state’s reliance on borrowing is at least significantly reduced.
Other funding gap options being discussed include rerouting vehicle sales tax to the highway fund, new fees on hybrid and electric vehicles, a vehicle-miles traveled tax, and new tolls.
The commission is soon expected to make its recommendations for how to address the need for new transportation revenue.
Transportation and Climate Initiative
At the same time, Maine Gov. Janet Mills is among a group of governors in the Northeast and Mid-Atlantic U.S. studying how to bolster transportation funding and reduce emissions. The group, titled the Transportation and Climate Initiative, is made up of eight Democratic and three Republican governors.
The study is looking at all truck, rail, air and ship movement through the region.
Among the options being considered by 11 states stretching from Maine to Delaware is a regional fuel tax to aid mass transit projects. The states and the District of Columbia are considering a plan to gradually reduce emissions over a 10-year period.
The regional tax on gas and diesel purchases amounts to a “cap-and-trade” plan. The expectation is fuel costs could initially increase anywhere from five to 17 cents per gallon in participating states.
Each state would be responsible for approving the final regional tax plan. Some states will require legislative approval to move forward. Other states only require action from the governor.
New Hampshire Gov. Chris Sununu last month removed his state from the group. He cited concern about increased fuel costs.