AUGUSTA — A bill that would change where utilities pay excise taxes on their fleets of vehicles, which could cost the city of Augusta up to $250,000 a year in revenue, is back before the Legislature.

What essentially was the same bill prompted heated debate, accusations of corporate retribution, and a rift between the city and Central Maine Power Co. before it was rejected on the Senate floor in the Legislature’s last session.

Additional Images

Rows of vehicles stand parked at Central Maine Power Co.’s Augusta Service Building on Old Winthrop Road. Staff file photo by Joe Phelan

Now it’s back as L.D. 514, sponsored by Rep. Andrew Buckland, R-Farmington, a freshman legislator who took the seat previously occupied by former Farmington Rep. Lance Harvell, who was the earlier bill’s sponsor.

The bill would change where utilities pay excise taxes on their vehicles, from the municipality in which their headquarters are located to the municipality where their vehicles are parked overnight. As of last year, CMP parked vehicles in Fairfield, Farmington, Skowhegan and Portland.

Unlike Harvell last session, Buckland said CMP officials did not ask him to sponsor the legislation. Buckland said recently he had not even talked to CMP’s lobbyist about the bill, and he sponsored it simply because he thinks it proposes a fairer way for excise taxes to be paid and would be good for his constituents. That’s particularly true in Farmington, where CMP keeps about 20 vehicles but does not pay excise taxes on them there.

“I think it’s a fairness issue,” Buckland said. “Now only 24 percent of CMP’s vehicles are parked in Augusta, yet Augusta gets 100 percent of that excise revenue. One reason I think it is worth taking another look at is the disparity still exists, and it’s costing towns excise taxes that could be really helpful in town budgets.”

But what would be good for Farmington would be very bad for Augusta, city officials said. Under current law, CMP pays about $283,000 a year in excise tax on 489 company vehicles to the Augusta, which is the home to CMP’s state corporate headquarters.

Ralph St. Pierre, Augusta’s finance director and assistant city manager, estimated that if CMP pays excise taxes on vehicles kept outside Augusta to the municipalities where they are parked, the city would lose $200,000 to $250,000 a year. He said that would amount to a nearly 1 percent increase in property taxes.

“It would be a $250,000 hole in the budget. Hence we’re trying to work with our legislative delegation,” Mayor David Rollins said. “We would like it to remain as it has always been.”

Rollins said he had lunch with CMP President Sara Burns before the new legislation was introduced this session, and she said CMP wouldn’t seek to have the legislation sponsored this session.

“I believe in taking people at their word and Sara Burns has never misrepresented anything to me, and I believe CMP is a very valuable member of the community,” Rollins said. “It makes sense it’s coming up again, because an array of smaller towns can get a little bit more money (if the bill passes).”

Sen. Roger Katz, R-Augusta, said he has discussed the bill with Buckland, and he understands Buckland’s perspective because Farmington, which Buckland represents and where he is a selectman, would benefit from the change.

St. Pierre said Farmington probably would get about $11,000 in additional excise tax revenue on CMP vehicles kept there if the law changes.

CMP officials did not return calls or emails seeking comment.

Last year, while speaking in opposition to the bill, city officials and Katz alleged CMP was backing the excise tax bill as a way to punish the city because CMP’s parent company, Iberdrola USA, didn’t like how the city dealt with Iberdrola subsidiary Maine Natural Gas. After a bid process, the city awarded a contract to provide natural gas to city facilities to rival gas company Summit Natural Gas of Maine.

CMP officials denied those accusations and said last year it supported the bill because it would require utilities more fairly to pay excise taxes on vehicles — as other, non-utility companies already do in Maine — to the municipalities where they are kept and where they travel local roads.

Buckland said it’s time to move beyond that dispute and reconsider the legislation.

“There is a history behind this that has to do with things other than vehicles,” he said. “It is time we get past that. I’m not sure those reasons still exist.”

The Legislature’s Taxation Committee is scheduled to hold a public hearing on the bill at 10 a.m. March 23 in room 127 at the State House.

“We’ll certainly be testifying. You can’t lose that much money without a fight,” St. Pierre said.

City officials and the bill sponsor, Buckland, hinted they might be open to a compromise on the bill in which the change is phased in over an undetermined time period to make the effect on municipalities such as Augusta more gradual, instead of taking a huge revenue hit all at once.

“It is going to be difficult for Augusta to adjust to that loss of revenue,” Buckland acknowledged. “If it doesn’t go in one fell swoop, there’s no reason it couldn’t be put in on a schedule.”

St. Pierre said if the change must be made, it might make sense to phase it in gradually, changing where utility company vehicles are registered as they are replaced with new vehicles.

Rollins said it sounds as though the bill may have more support in the Legislature this year, and if it is likely to pass, a phased-in change would mean a more gradual hit to Augusta’s revenue, and adjusting to that would be easier.

Katz said it’s hard to predict whether the bill has a better chance of passing this time.

“It’s like deja vu all over again with this bill,” he said. “Trouble is, we’re dealing with a whole new jury, so to speak, with a lot of freshmen legislators who haven’t seen this debate before. All things being equal, as the Augusta senator, I would like to keep the excise tax process the same. But there are certainly a number of towns around the state that’d benefit from a change. And that’s what we’re up against.”

Keith Edwards — 621-5647

kedwards@centralmaine.com

Twitter: @kedwardskj

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