- The Washington Times - Sunday, November 25, 2012

A backlog of proposed road projects and repairs to aging highways, bridges and transit systems has leaders in Maryland and Virginia eyeing the perennially unpopular proposal of raising their states’ gas taxes to generate revenue in what has become a national challenge for states to find funds for transportation fixes.

In Virginia, where efforts to relieve congestion in the D.C. suburbs are quickly overtaken by the demands of a growing and car-dependent population, officials say the cost of massive road construction is becoming unmanageable for the public sector. In Maryland, budget analysts say the state could run out of money for new projects by 2018, while transportation officials warn that crumbling infrastructure has reached epidemic levels and that state lawmakers must act soon or face the consequences.

“There’s going to be a push by a lot of people to do something in the upcoming [General Assembly] session,” said Gus Bauman, a lawyer who served as chairman of a Maryland commission last year that made yet-unheeded recommendations to raise transportation funds. “What’s it going to take? A bridge falling into a river here before they actually take this seriously?”

Engine of revenue

Most states use taxes on gasoline to offset the costs of transportation projects and maintenance. Across the country, state gas taxes range from 8 cents a gallon in Alaska to 49 cents a gallon in New York, on top of the federal tax of 18.4 cents a gallon. Maryland’s rate is 23.5 cents a gallon — the same as the District’s — while Virginia’s gas tax is 17.5 cents a gallon.

Fourteen states avoidthe delicate issue by taxing at a fixed percentage of the gas price or tying the tax to the rate of inflation, meaning the tax increases automatically. For example, gas taxes in Georgia and North Carolina increased last year, but only because built-in inflation indexes required them to do so.

Neither Virginia nor Maryland ties its gas tax to inflation, leading to pitched political battles over the prospect of tax increases — especially during times when prices at the pump are high.

But facing an increasing urgency to address transportation issues, Virginia Gov. Bob McDonnell, a Republican, said last week that he is evaluating a proposal to raise the state’s gas tax, which has not changed since 1986.

The state has leaned heavily on toll roads for revenue and has an extra 2.1 percent sales tax on gas in Northern Virginia.

In recent years, state Republicans have proposed diverting a portion of the sales tax to transportation as an alternative to raising the gas tax, but Democrats have argued that would unfairly take money from the general fund that pays for education and other programs.

Gas tax discussions returned to the forefront in Maryland this month when the Department of Legislative Services announced that state transportation officials may have overestimated anticipated revenue over the next six years by as much as $2 billion, and that the state desperately needs more revenue streams to fund road and major transit projects such as the Purple Line and Red Line light-rail systems.

Maryland’s gas tax has not been raised since 1992. Its tax is the 29th-highest in the country, while Virginia’s ranks 40th.

Maryland, Iowa and Michigan this year were among the few states where lawmakers considered increasing the gas tax. Each proposal failed to pass the state legislatures.

“It’s the third rail of politics now,” said John Townsend, a spokesman for AAA Mid-Atlantic. “If you touch it, you perish.”

Keith Madsen, who owns two gas stations in Baltimore County, said that in addition to hurting motorists, gas tax increases are bad for distributors and station owners. Lawmakers don’t consider that higher gas prices could cause drivers to buy less gas per visit and make more purchases, which would require station owners to pay more in per-transaction fees to credit card companies, he said.

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