Letter to the Editor

October 6, 2009

The Yarmouth Town Council does not generally declare a position on pending State or Federal initiatives. But from time to time an issue or initiative comes forward that has critical impact on the functions or finances of town government. It is for this reason we feel it is our duty to report on how the proposed Excise Tax Referendum (Question 2) will affect the Town of Yarmouth. We have examined this issue and on November 3 we will each be voting “NO” on Question 2. If Question 2 is approved, the excise tax would be rolled back for cars registered in Maine for the first 5 model years. On average, the tax reduction would be over 50% for cars less than 5 years old. For cars more than 5 years old, there would be no tax reduction. In Yarmouth, more than half of all cars are older than 5 years and therefore would receive no tax break. Statewide, 68% of the cars on the road are over 5 years old and would not benefit from this change. If Question 2 is approved, the revenue loss to the Town will be at least $600,000/year– year after year. This revenue loss would need to be made up through property tax increases, cuts in services (quite likely road work), or some combination. Property taxes would need to rise 43¢/$1,000 of value--an increase of 2.2%-- and that increase hits all property owners, whether or not they own a newer model car. Question 2 would provide an absolute exemption from Sales taxes for new hybrids and alternative vehicles, as well as for new cars with highway mileage of 40mpg or greater. These revenue losses would hit State government and would create spending cuts or tax and fee increases. One of the largest State expenditures is for local education, which means secondary impacts on property tax can be expected. New cars will also receive free passes on excise taxes for 3 years—not just a rate rollback. At Yarmouth Town Hall, we lack data on mpg rates for newly registered cars, but these new exemptions will flow straight from the Town’s budget, out of the property tax payer. Statewide, it is estimated that Question 2 will shift over $200 million per year from tax on cars to tax on property. This $200 million per year property-tax-paid subsidy for automobiles is not a good way to promote energy efficiency or cleaner air. For these reasons, we the members of the Yarmouth Town Council oppose Question 2, and we urge every citizen to learn more about the proposal and cast their votes on November 3. Respectfully, Erving Bickford, Jeffrey Darrell, Mark Hough, Kent Peterson, Thomas Renehan, William Schaffer, Carl Winslow Members of the Yarmouth Town Council 2009-2010

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