Maryland plan for 15 cents gas tax increase moves forward

ANNAPOLIS, Md. (AP) - Proposed taxes and fees aimed at raising more than $800 million in new transportation revenue annually in Maryland headed toward the Legislature and Gov. Martin O'Malley on Tuesday, as a state commission formally approved a plan to increase the state's gas tax by 15 cents over three years.

The recommendations by the Blue Ribbon Commission on Maryland Transportation Funding put the proposal on track for a revved-up debate in the General Assembly's legislative session that begins in January. Lawmakers on the panel said the upcoming session was the time to take up the proposal.

"This is the year of transportation, and if we don't hit a home run this year, I don't know if we can count on next year to carry out the recommendation," said Delegate Carolyn Howard, D-Prince George's.

The tax, which would apply to diesel fuel as well as gas, is the biggest component of the package. The state's 23.5-cent gas tax would increase by 5 cents a year for three years. It would raise about $491 million a year after fully implemented. After that, the tax would be indexed to the Construction Cost Index to keep up with inflation. Maryland hasn't raised its gas tax since 1992.

The proposal also includes a 50 percent increase in vehicle registration fees to collect about $165 million a year. Another proposal would either increase the vehicle titling tax from 6 percent to 6.5 percent or eliminate trade-in allowances to raise about $70 million. There would also be fare increases and the elimination of free passes for buses. The vehicle emissions inspection fee would double from $14 to $28.

"Everything here is a user fee. It's all tied to transportation," said Gus Bauman, the panel's chairman. "Whether one drives or is on public transit, everyone is going to share in this, but it's all user fees tied to transportation users. And, of course, the motor fuel tax, importantly, captures people who are driving through and stopping for fuel in Maryland when they're from out of state. "

But critics of the plan, including Lon Anderson, a spokesman for AAA Mid-Atlantic who was on the panel, said the plan put too much of the transportation funding burden on motorists.

"I would just say to you that this is an unbalanced list," Anderson said.

The proposal also calls for a constitutional amendment that would forbid transferring money out of the state's Transportation Trust Fund to plug budget holes elsewhere. Critics of O'Malley's handling of the budget during the recession and its aftermath have pointed to funding transfers from the fund to address other shortfalls, at the expense of transportation.

"I don't see how you sell this to the public unless you say, `We stopped the raiding,"' Anderson said. "Otherwise, there is no integrity."

But Delegate Tawanna Gaines, a Prince George's Democrat who also was on the commission, said she believe it's unfair to say the funds were raided, because money has been paid back.

"You know, sometimes you borrow from your savings account with the hope to be able to put it back, and that's what we've done to the Transportation Trust Fund, and I think we're at a point now that we can no longer borrow," Gaines said. "I think additional revenue is definitely needed, and I think with these recommendations for these increased fees we'll be able to do that."

Gaines also emphasized that the gas tax would be applied at the wholesale level, and that oil companies wouldn't necessarily pass it on to consumers at the pump.

But Anderson was skeptical. "Exxon didn't get to be the biggest corporation in America by paying the expenses themselves," Anderson said.

Lawmakers talked about a transportation revenue package in the last legislative session, but the proposal fizzled. The idea has picked up momentum in recent months. O'Malley, speaking last week at the start of a special session on congressional redistricting, said he was considering the panel's request. He also mentioned the need for transportation funding during the summer conference of the Maryland Association of Counties in August.

"There's been a lot of debate in these times of austerity and scarcity about less, less, less, cut, cut, cut," the governor, a Democrat, said last week, "but it's not a Democratic idea or a Republican idea that in order to create jobs, a modern economy requires modern investments."

Maryland Transportation Secretary Beverley Swaim-Staley has underscored the state's transportation funding problem by pointing out it would cost about $12 billion just to fund the top priority project in each county and the city of Baltimore.