Maine Motor Vehicle Taxes Are New Highway Fund Source
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Maine Gov. has creating a reliable revenue stream to fund highway repairs using portions of state motor vehicle taxes.
Mills said the new measure will decrease state borrowing by creating “a sustainable, long-term source of funding for infrastructure repair and unlock nearly a billion dollars in matching federal funding.”
The new funding will inject money into the state’s highways by allocating 40% of the 5.5% sales tax on vehicle purchases. It also calls for taking 40% of sales and use taxes collected by the state Bureau of Motor Vehicles, which is under the secretary of state’s office.
The new revenue stream is projected to provide more than $200 million for infrastructure repair every two years. In the past, Maine has issued bonds to provide revenue for highway transportation improvement projects.
This morning, I signed a bipartisan Highway Fund Budget that builds on my Administration’s record investment in Maine roads and bridges. — Governor Janet Mills (@GovJanetMills)
The governor’s office noted the funding source will enable the Maine Department of Transportation to implement its three-year work plan. These projects include 264 highway safety and spot improvements, 271 miles of highway building or repairs, work on 302 bridges and paving 3,178 miles of roads.
, commissioner, reacted to the governor’s action. “The need for sustainable, dedicated revenue for MaineDOT’s capital program has been a persistent challenge for decades, making long-term planning very challenging,” he said.
Before Mills enacted the new law June 16, the state faced continued difficulties in financing highway infrastructure expenditures. In October, , state commissioner of the department of Administrative & Financial Services, completed the Four-Year Revenue and Expenditure Forecast required every two years under Maine law. The 32-page report projected a shortfall in the 2024 biennium of $712 million “representing a structural gap between revenues and expenditures that appears to be widening.” Maine adopts budgets for two-year periods.
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The , a nonprofit and nonpartisan group representing state taxpayers, .
“Maine Policy has long supported redirecting a portion of automobile-related sales taxes to the Highway Fund to shore up the state’s transportation infrastructure, reduce future borrowing and spare Mainers from tax increases,” said CEO . “We’re pleased the Legislature has finally endorsed this change to save taxpayers from future debt.”
