The soft market for automobiles is hurting state treasuries, as I noted earlier this week, but municipal governments are also feeling the pinch. The Patriot Ledger reported in May that local revenue from excise taxes is plunging as residents put off buying new cars:

In Weymouth, motor vehicle excise tax collections are lagging far behind what they were just a year ago.

“We haven’t seen this type of dramatic drop since the early ’90s,” said James Wilson, Weymouth’s chief financial officer.

As of May 1, the town had collected $4 million, down from $5.3 million at this point last year and $5.9 million in 2006…

The state Department of Revenue warned communities in December that excise tax revenue was leveling off and could drop in 2008.

“Combine cars that run longer with thrifty owners buying more used vehicles and fewer new vehicles and the trend is pretty clear: fewer vehicle excise dollars flowing to cities and towns,” the state report issued in December said.

Auto excise taxes account for about 3 percent of total revenue in a typical Bay State community (it’s closer to 5 percent in a lot of western towns without much new development). In flush times, that may not seem like much, but these days local governments can’t shrug off any form of revenue.