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Lawmakers Considering Gas Tax Increase to Help Fund Highway Repairs

With gasoline prices trending downward, some lawmakers are looking at a possible hike in the state’s gas tax as one way to help fund $168 million in needed highway repairs.

For decades, the state Department of Transportation has been forced to prioritize its list of highway and bridge repairs though a process that usually means projects get put off until the next budget cycle. State Rep. Andrew McLean, a Gorham Democrat who co-chairs the Legislature’s Transportation Committee, says the gap between the work that’s needed and the available money to pay for it shows no sign of closing.

“The DOT, when they issued their work plan about a month ago, said that we are running a deficit of about $168 million every single year just to keep up with basic maintenance for our roads and bridges,” McLean says.

There are increased calls for lawmakers to support a $100 million transportation bond that would address several major infrastructure repair projects. Efforts to accomplish savings through department efficiencies and streamlining have yielded some additional money for road reconstruction, but McLean says that approach has figuratively — and literally — reached a dead end.

“We’ve come to a point where the efficiencies have run out, finding a couple of million dollars here, a couple of million dollars there is not really possible and I think this is one of the important — if not the most important — issue that we’re facing in our committee,” McLean says. “I think we owe it to the people of Maine, our businesses and our economy to at least have a conversation about what we do.”

Much of the funding for repair and maintenance comes from a federal gas tax of a little more than 18 cents a gallon and a state gas tax of about 30 cents a gallon. But those revenues have declined as Mainers have responded to a prolonged era of $3-plus-per-gallon prices by driving less and purchasing more fuel-efficient cars.

With gasoline prices plummeting, lawmakers such as Sen. Kimberly Rosen, a Bucksport Republican, are beginning to look at the state’s gas tax as a potential solution to at least part of the shortfall.

“If we did raise the gas tax, say five cents, how much would that generate in one year?” Rosen says.

Based on a return of about $7 million for every penny of tax assessed, McLean says that five cents would generate about $35 million a year in additional revenue for road and bridge repairs. According to the Tax Foundation, that would place Maine at about 35 cents per gallon in state gas taxes and among the 10 states with the highest gas taxes in the country.

That’s a big step up from Maine’s current middle-of-the-pack standing nationally. Still, according to the The Hill, one of the beltway’s top political newspapers and websites, while Congress has resisted a federal gas tax hike, six states have implemented increases since July 1 of.

Rep. Bradley Farrin, a Norridgewock Republican on the Legislature’s Transportation Committee, says even a temporary gas tax increase would represent a big boost for Maine’s transportation department.

“Could we move fast enough to do a temporary gas tax while the price is low?” Farrin says. “Right now prices are low, we don’t know how long that’s going to stay, and we don’t want to put it on the taxpayers of Maine until we know what the long-term piece is, but as a committee could we put together an emergency action that ties to the price of gasoline.”

Lawmakers on the panel have continued their efforts on reviewing options for increasing road repair revenues and are slated to discuss the issue later this week.