AUGUSTA, Maine — Gov. Janet Mills signed a transportation budget into law on Friday, inking a compromise that solved one of the major spending issues facing lawmakers as they race to end work for the year.
The spending plan for the transportation budget, which is separate from the larger state budget, is notable because it dedicates roughly $200 million annually in ongoing funding to a system that has been reliant on borrowing and short-term fixes over the past decade.
That new money comes from diverting 40 percent of sales taxes on vehicle purchases and 40 percent of sales and use taxes collected by the Maine Bureau of Motor Vehicles from the state budget to the transportation side. It came together quickly after legislative Republicans demanded dedicated funding for roads and bridges in late budget talks.
”This bill is good policy,” Mills said Friday morning while flanked by Democratic and Republican lawmakers in her cabinet room at the State House. “It’s fiscally responsible. It’s the work of good, bipartisan compromise. The Maine people will benefit.”
Republicans led by Sen. Brad Farrin of Norridgewock and Rep. Wayne Parry of Arundel, who are members of the transportation panel, led negotiations on the package with the Mills administration. The Democrats who chair the committee initially opposed the deal, but top party appropriators helped craft an amendment that changed the tax revenue mix.
It is a major change for the Highway Fund, which now represents 30 percent of the Maine Department of Transportation budget. Maine borrowed money for eight straight years to close gaps between the level of state funding and what the department determined it needed to adequately maintain roads, bridges and other infrastructure.
The erosion of the gas tax as a major funding source has been at the center of those problems. A Republican-led Legislature and former Gov. Paul LePage ended indexing of the tax in 2011, and the rise of fuel-efficient and electric vehicles has made the tax less effective.
Lawmakers are acting on a problem that has mystified them in the past. A legislative task force dedicated to studying long-term funding broke down over disagreement on raising the gas tax or finding revenue to divert to the transportation side.
Future changes will likely be needed, but the agreement marked a major step forward on the subject. Mills said she thinks the more permanent funding model is “now embedded in our systems.”
“This is the stuff that we do under the dome for the good people of the state of Maine,” Farrin said Thursday on the Senate floor.
BDN writer Billy Kobin contributed to this report.
