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Maine Republicans Call for Suspending Fuel Taxes

AUGUSTA, Maine -- The Maine state legislature should quickly suspend state fuel taxes for at least 60 days and take other steps to "sustain our economy" as gasoline and oil prices continue to rise, top Republican lawmakers said Tuesday. The Portland Press Herald reported that that was one of several ideas GOP lawmakers outlined in a letter urging Gov. John Baldacci to summon lawmakers to the State House as soon as possible.

The proposal got a cool reception from Baldacci and a lukewarm response from his fellow Democrats in the Legislature, according to the newspaper. Baldacci said through an aide that he was unlikely to call the legislature into special session, though he did not categorically rule it out.

The gas tax increased from 25.2 cents a gallon to 25.9 cents a gallon July 1, under a state law that automatically adjusts it once a year to keep pace with inflation. The tax on diesel fuel also went up July 1 for the same reason, rising from 26.3 cents a gallon to 27 cents. Gas prices now top $3 per gallon, and Mainers are steeling themselves to cope with high heating costs this winter.

"We think action needs to be taken now to address these high gasoline and fuel costs," House Minority Leader David Bowles, R-Sanford, said at a news conference outside an Augusta convenience store that was selling regular gas for just under $3.32 a gallon.

Citing a climate of "hardship and fear" as motorists and homeowners struggle to keep up with skyrocketing prices, Senate Minority Leader Paul Davis, R-Sangerville, said Mainers "are crying out" for help and the governor must heed their call.

According to the Press Herald, Beth Nagusky, Baldacci's energy adviser, said a special session is unlikely unless the Republicans explain how they would make up the revenue that would be lost by suspending fuel taxes. Those taxes are expected to raise $230 million this fiscal year, so dropping them for two months would deprive the state of close to $40 million.

Almost all of that money would go into the state's highway fund, which pays for highway and bridge improvements and covers most of the costs of the Maine State Police and the state Bureau of Motor Vehicles.

Republicans said the state would have to find savings elsewhere to fill the budget hole created by the suspension of fuel taxes. They told reporters the state could block the expansion of the Dirigo Health insurance program and push one monthly payment of aid to cities and towns into the next fiscal year.

Bowles described those ideas as options for review, not a concrete proposal. The Republicans did not identify any cost-cutting ideas in their letter to Baldacci.

The governor is concerned about high gas and heating-oil prices, Nagusky said, but "he believes the real problem's at the federal level" because oil companies are recording "record outrageous profits."

Baldacci is determined to ferret out profiteering, and he has "made it clear that he will throw the book at any Maine company that is price gouging," said Nagusky, who heads the governor's Office of Energy Independence and Security.

Nagusky joined Democratic leaders in the Legislature in praising the conservation initiatives in the GOP action plan, but House Majority Leader Glenn Cummings, D-Portland, said high fuel prices stem from "a failed federal energy policy."

On a related front, state officials are implementing a directive from the U.S. Environmental Protection Agency that will allow retailers to start selling a higher-polluting "winter blend" of gasoline earlier than they normally would to blunt the effect of any gas shortages.

The EPA has given the states permission to switch now from a so-called "summer mix" of gasoline, which limits ozone pollution, to a more plentiful "winter mix," said Deborah Garrett of the state Department of Environmental Protection. That seasonal switch normally occurs Oct. 1, Garrett said.

Moving up the effective date will "increase the supply of gasoline and minimize potential gasoline disruptions caused by Hurricane Katrina," according to a letter from the EPA to state officials.
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