QUESTION 2 - MUNICIPAL EXCISE TAX

Question 2 on the November 3 ballot reads as follows:

"Do you want to cut the rate of the municipal excise tax by an average of 55 percent on motor vehicles less than six years old and exempt hybrid and other alternative energy and highly fuel-efficient motor vehicles from sales tax and three years of excise tax?"

This initiative has been the product of the Maine Heritage Policy Center.

If the Question is approved, it will become Law. (That means if the majority of the voters vote "YES", it will become law. If the majority vote "NO", it will not.)

What is the law that has been written relevant to this Question?

LD 974 "An Act to Decrease the Automobile Excise Tax and Promote Energy Efficiency", (which) would cut Maine's excise tax rate in the first year of registration from 2.4 percent to 1.2 percent. In the second year, the rate would be cut from 1.75 to .08 percent. For the third and subsequent years, the rate would be cut from 1.35 to .04 percent.

The law also eliminates the sales tax and the first three years of excise taxes on hybrid, hydrogen, electric and other high-tech vehicles and high-mileage vehicles.

How does this apply to our local communities?

1. Municipalities like Eddington, Clifton and Holden keep the excise tax collected from the registration of cars belonging to residents of their towns. The towns' Boards of Selectmen use that money for each town's road reconstruction, labor, equipment, salt and sand and other costs related to their town's roads. [NOTE: This does not apply to Route 9, 46, 178 or 1A which are the responsibility of the State Department of Transportation.]

2. This law will not lower the excise tax - associated with a vehicle's registration cost - of any vehicles older than six years. And this law will not exempt any new vehicles from sales tax or give them a three-year exemption from the excise tax associated with registration unless the vehicle is a hybrid, hydrogen, electric or other high-tech or high mileage vehicle.

Looking around at the vehicles that drive around Eddington or are parked in the driveways of our town's residences, most appear to be close to or older that six years. Those owners will not see a benefit by the passage of this Question or law.

Vehicles less than six years of age will see a 55 percent reduction of cost in their annual excise tax until the vehicle is six years old.

The owners of the hybrid, hydrogen, electric or other high-tech or high mileage vehicles will see no benefit once those vehicles become older than six years.

3. Eddington does have one car and farm machinery dealership - Eddington Auto; but it is unlikely that business will see much benefit from this law. However, if Eddington Auto does sell hybrid, hydrogen, electric or other high-tech or high mileage vehicles, it may see an increase in sales if this law passes.

How will the State benefit if this Question/law is passed?

1. The Maine Heritage Policy Center states that the tax cut it proposes will stimulate auto sales and that auto sales are a chief component of the American economy.

2. The Center also reports that approximately 6,000 people are employed at 134 licensed new car dealers throughout the state.

3. The purchase of a new car carries a high excise (sales) tax, which the Center states is an obstacle to new car purchases. This is the reason that the Question/law proposes no sales tax for the specified cars and why it proposes an exemption of three years for any excise (registration) tax (when the value of the car is at the highest). [NOTE: The registration/excise tax charged each year is based on the vehicle's Blue Book posted value. However, Maine's rate becomes fixed when the car is six years old regardless of its Blue Book value.]

This Writer's Thoughts:

1. I am totally turned off by the ads opposing this Question. Threats that the passage of this question will (automatically) increase my property taxes raise my blood to the boiling point. What doesn't threaten to raise the property taxes of everyone in this state? So enough on that issue. The ads have completely avoided addressing THE issue which is that excise taxes across the board are too high. Period.

2. I don't know how much Eddington or Clifton would really lose $$ wise if this Question/law passes. I've heard $137,000 for Eddington and something like $67,000 for Clifton. That is probably bases on the 55 percent reduction for those cars less than six years of age that were registered in Eddington and Clifton last year. The figure probably came from MMA (Maine Municipal Association)

3. BUT-I can't see why buyers of only certain select types of vehicles should benefit from the exemptions listed in this law. And a lot of cars that are six years and older are in good condition, well cared for and get good mileage.

3. Everyone uses the roads. This is not a one-size-fits-all state. We have a FEW large cities (not metropolitan areas, just large cities), and some of the newer hybrids, etc. vehicles may work there very well. However, for the vast majority of this state, we're dealing with rural roads - and potholes and shifting asphalt at that. We're looking at (and for) trucks and tough cars that last in those areas and under those conditions. The vehicles "protected" under this law aren't going to be the bread-and-butter trucks and tough cars most of us are going to be buying - or driving longer than six years, thank you very much.

3. I'm all for supporting the Maine Automobile Dealerships. My dad worked for one for years right in Bangor. But the way to do that is to write a law that brings the sales tax and the registration costs into a more reasonable bracket. Right now they aren't. Not in Maine.

I have a 2002 model car. Registration for that car in Florida is $39. Here in Eddington it's $107. (not including the special license plate). (BTW, I loved hearing Florida has it written into their state constitution there will be no state income tax in that state, either.)

Look at the number of "snowbirds" who leave Maine and take their cars with them, register their cars out of state because the costs are reasonable, and then come back to Maine for six months minus one day with those cars - just to avoid the excessive tax. Those registration costs could stay right here if the costs were more in line with reason than with highway robbery.

4. The Boards of Selectmen in Eddington and Clifton and Ellsworth (and probably Holden) have voted to oppose Question 2.

And I'm going to oppose it, too. Not because those governments have opposed it but because I think it's a bad bill. It singles out certain vehicles that are not going to be genetically workable across the state, particularly in rural areas, certainly not in the winter (and I don't know too many families that can afford a separate winter vehicle) and not with the cost of such vehicles when one takes in to consideration the average income of Maine families.

I think car registration costs and Excise Taxes across the board in Maine are too high and what this state needs is a bill that lowers all excises taxes, including cars older than six years. I understand towns need money for road repair and associated costs but the answer is to expand opportunities for businesses to come into the communities and succeed, thrive and become a productive part of the town's tax base.

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Have a good weekend. Woody Woodson's @ Clewley Farm Restaurant tomorrow night. And Dola's singing Gospel Music there Sunday afternoon from 1-2:30 as a Benefit for the Clifton Library. Five Seasons Gift Shop will be open Saturday. LOTS of beautiful gifts for everyone in the family on display. Reasonable pricing, too.

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Monday's blog: Question 1