AUGUSTA — Because most Mainers are deeply interested in not having their taxes increased, lawmakers are beginning to look for ways to have people from other states contribute to the growing cost of government.
Imposing seasonal taxes is one way to shift some of the expenses onto people who visit Maine but do not live here.
“Why not export some of the costs to out-of-staters?” said Rep. Andrew McLean, D-Gorham, House chairman of the Legislature’s Transportation Committee.
It is an idea that is not winning many fans in the tourism industry, which fears it could spur potential visitors to go elsewhere.
McLean has a proposal on the table to hike the state’s gasoline tax between June and November by 23 percent in a bid for more revenue from many of the state’s 20 million or more visitors each year.
The bill would lower the gas tax by 10 percent the rest of the year to help ease its impact on Mainers.
Another bill proposes to let municipalities impose a local sales tax that could be applied seasonally, another way to sock tourists.
A public hearing has yet to be scheduled on McLean’s bill, but the Taxation Committee plans one March 27 on the sales tax measure.
The idea of trying to tax visitors more might prove a hard sell.
Steve Hewins, president and chief executive officer of HospitalityMaine, an industry trade group, said the group “would not be in favor of increasing the gasoline tax during the summer and fall because this would be a new tax on residents, as much as it is on visitors.”
“Moreover,” he said, “Maine already receives extra tax revenue from nonresident visitors purchasing gas in Maine during the busier seasons, and we want to encourage visitors to explore more remote, rural regions of the state, not disincentive that with higher fuel costs.”
Chris Fogg, chief executive officer of the Maine Tourism Association, said his group opposes the idea of a seasonal hike in the gas tax.
“We understand that our roads and bridges need to be in top form,” he said.
However, he said, the state “risks losing valuable tourist dollars if tour companies decide to head to New Hampshire or other locations because the cost of coming here is too high.”
Tour companies, including bus charters, “looking to book fall foliage trips, for example, will consider the overall cost of these tours including retail sales tax, meals tax, lodging tax and gas tax,” Fogg said.
He said visitors already contribute more than $600 million to the state, so Maine should not take steps that could “negatively impact future visitation.”
Fogg also said a seasonal increase would impact Mainers more than visitors.
“Attempts to increase taxes that visitors pay always affect our citizens to a great extent,” he said.
McLean said his idea was spurred by the recognition Maine has hundreds of millions of dollars in backlogged infrastructure work on which is must catch up. For years, he said, it has failed to keep up with necessary spending as it failed to come up with $150 million more annually merely to maintain the roads, bridges and other public facilities.
Given Maine is “not spending enough on our infrastructure,” McLean said, the state must find additional resources.
He has one bill that proposes to find some of the money by hiking the gasoline tax from 30 cents per gallon to 36.5 percent, along with a variety of other motor vehicle-related increases. All of the additional money would go to the Highway Fund.
But his other bill offers a different approach: Soak the outsiders.
McLean said Maine Turnpike data show clearly the vast influx of summertime drivers who come to Maine for its lobster, its beauty and the opportunities it provides to get away. What the numbers show is “a beautiful bell curve” that highlights the opportunity a seasonal gas tax might provide.
He said there probably is not another state that could try to shift costs onto the tourists who flock in because Maine sees such a surge of outsiders in its warm months.
Seasonal taxes might work in Maine, he said, because nicking tourists for $5 or $10 in additional gas tax revenue is not going to matter to their calculations about visiting. Given the constant fluctuations in gas prices, he said, they probably would not even notice.
Most of the money for road and bridge work in Maine comes from the state’s tax, which has not changed since it went up a nickel a gallon in 2011. A federal tax of 18 cents per gallon has not increased in a quarter-century.
McLean said Maine needs to have “a tough conversation” about how it is going to fund all the infrastructure work that has piled up over the years. The state has not been willing to budget enough money for years, he said, and has instead relied on bond issues that fall short.
He said it would help if more people understood money raised from the gas tax goes only to the Highway Fund, something guaranteed by the Maine Constitution.
Unless something changes, he said, “our roads are not going to get better.”
A 2016 report by the American Society of Civil Engineers that reviewed Maine’s infrastructure found the state’s roads are especially bad, securing only a D on the group’s report card.
The roads’ poor condition costs the average Maine motorist $485 a year, according to the report.
Steve Collins can be contacted at:
scollins@sunjournal.com
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