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Higher gas tax among options for Md. transportation revenue

- The Washington Times - Friday, April 29, 2011

A failed proposal to raise Maryland's gas tax could see new life this fall, as officials look for more revenue to fund transportation projects and road maintenance.

The tax hike was one of several proposals mentioned Friday at a panel discussion between Gov. Martin O'Malley and a state-appointed commission charged with finding ways to fix a transportation system wracked in recent years by declining revenues and fund transfers.

The 28-member blue ribbon commission — consisting of state legislators, agency directors, local officials and private stakeholders — recommended in February that the state raise $800 million in additional revenue for its largely depleted Transportation Trust Fund, or TTF.

Commission members acknowledged that while many residents would be unhappy with an increase in already-high gas prices, a new tax could be key in helping state, counties and local governments with much-needed road maintenance and improvements.

"The pace of our investments is not sufficient for the needs we have," said Mr. O'Malley, a Democrat. "We have to find a better way forward."

Difficult economic times have forced the state in the last three years to cut $2.1 billion from the TTF and use much of the money for non-transportation purposes. As a result, local governments have lost millions in highway user revenue often used for road upkeep, and Mr. O'Malley said the state has fallen behind on basic maintenance and many infrastructure projects.

While legislators restored about $13 million in local road aid for the coming year, the commission has proposed several other ways to protect state transportation funds, including relying more on public-private partnerships and placing tighter restrictions on when the state can use TTF funds for non-transportation purposes.

Such restrictions could limit fund transfers only in emergency circumstances or by a supermajority vote in the assembly and would have to be enacted by a constitutional amendment.

"The citizens of Maryland would be more willing to invest in transportation if they had a stronger sense that the money they were investing would go to transportation," said commission member and Howard County Executive Kenneth S. Ulman.

Even with better fund management, some officials have said a tax increase is necessary and all but inevitable. The state currently imposes a 23.5 cent-per-gallon tax on gasoline, a rate officials say has become increasingly inadequate as many residents are now driving less, using public transportation and buying more fuel-efficient vehicles.

Sen. Robert J. Garagiola, Montgomery Democrat and commission member, sponsored a bill this session that would have increased the rate by 10 cents per gallon. While the proposal failed to gain traction, he said it could come up again in this fall's redistricting special session.

Commission members also discussed alternate proposals, including a new 6-percent sales tax on gasoline and a statewide sales tax increase of as much as 1 percentage point, with the extra revenue going specifically to transportation.

Mr. Garagiola estimated a sales tax on gas could generate $580 million per year, while a 1-percentage-point increase in the statewide sales tax could generate as much as $700 million.

"The sooner we deal with it, the better," he said. "The longer we wait, the worse condition our roads are going to be in and our infrastructure is going to be in."

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