Town of Yarmouth

1
Motor Vehicle Excise Tax Initiative November 3,
2009

• Town of Yarmouth
• Presentation to the Town Council
• September 17, 2009

2
Referendum Ballot Question 2 Nov 4, 2009

• Do you want to cut the rate of the municipal
  excise tax by an average of 55 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?
• Question Number _ 2_

3
WHAT IS THE EXCISE TAX?

• The excise was adopted in 1929- to replace a
  property tax rate by town. Rates in place for
  the past 80 years.
• Tax rates/basis is set by state law- same in all
  towns.
• TAX BASED ON MSRP- 2.4, 1.75, 1.35, 1.0,
  0.6, 0.4 (currently)
• 55 of Yarmouth cars taxed at lowest rate (0.4)
  
• Excise generates approximately 1.5 million/yr
  in revenues all of which stays in Yarmouth.
• The estimated revenue losses under the proposal
  would add 0.43/1000 to the current Yarmouth
  property tax rate to replace it (2.2 tax rate
  increase).

4
How Are Excise Revenues Used?

• Yarmouth implicitly uses excise tax revenues for
  road maintenance and repair (not a legal reqmnt)
• Excise tax offsets property taxes
  1,500,000/year
• Paving and road project budget 800,000/yr
• Plus maintenance, equipment, and labor budgeted
  at 1,180,517/yr Total of 2 million/yr /-.
• 65 miles of roadway, 17.5 miles of drain lines,
  and 1233 catch basins, 22 miles of sidewalk
  maintained summer and winter plowing, sanding,
  salting, sweeping, patching, painting, repairs,
  mowing, inspecting, ditching, etc.

5
Est. Tax and Budget Impact- 557,000/yr
6
Yarmouth Property Taxpayer Impact Est.
7
Yarmouth Car Registration Stats- (Random sample
95 confidence level /- 6.5)
8
WHAT THE INITIATIVE DOES- STATE WIDE

• It reduces the excise tax for some..
• but not for the majority - Most cars on the
  road are more than 5 years old and will receive
  NO benefit. (68 for Maine, 55 for Yarmouth)gt 5
  years.

9
Special Exemptions Subsidizing automobiles
with property taxes to make the world a greener
place?

• Sales tax exemption for hybrid, high mpg or alt.
  fuel vehicles only.
• 3-year excise tax exemption for hybrid or alt.
  fuel vehicles only.
• Curious results occur
• Tax Exemptions
  No Tax Exemptions
• Cadillac Escalade Hybrid
  Ford Focus
• Weight 7,500 lbs 2,600 lbs
• Combined MPG 20 27
• Carbon Footprint 9.2 6.8
• MSRP 80,000 (approx.) 17,000 (approx)

10
Spending By Maine Municipalities

• Is municipal spending too high in Maine?
• Maine ranks 41 in local spending burden.
  according to the Maine Heritage Policy Center.
  (as a of personal income and 40 on a per
  capita basis.)
• Spending by municipalities in Maine is
  relatively quite low.
• Maine local government spending on roads ranked
  15th and 16th nationwide as a percentage of state
  income and per capita.
• This reflects both the priority that Mainers put
  on our roads and the high costs associated with
  having a large state and rough winters.
• And perhaps the high cost of always playing
  catch-up with road work. njt

11
Town and City Spending in Maine