- The Washington Times - Thursday, October 31, 2002

A strong push to raise Maryland's gasoline tax by as much as 10 cents per gallon is expected in the next session of the General Assembly, and neither Republican Rep. Robert L. Ehrlich Jr. nor Democrat Lt. Gov. Kathleen Kennedy Townsend has strongly opposed the tax increase as they campaign for governor.
Lawmakers are scheduled to begin drafting the proposal immediately after Tuesday's election, and there is a consensus in the legislature that Maryland's 23.5-cent-per-gallon gasoline tax must go up to replenish the Transportation Trust Fund, said a source familiar with the plan.
Throughout his campaign, Mr. Ehrlich has pledged not to raise the state income or sales taxes as part of his plan to erase a $1.7 billion budget shortfall anticipated next year but he hasn't ruled out certain fee increases or a gas-tax increase.
Despite the growing support among state legislators for a gas-tax boost, Mr. Ehrlich said he prefers a proposal from House Speaker Casper R. Taylor to redirect 0.5 cents of the state sales tax to the Transportation Trust Fund, which pays for road projects and mass transit.
"It will take more than a gas-tax increase to fix the Transportation Trust Fund," he told The Washington Times last night, but such an increase could not, he said, be taken "off the table."
Mrs. Townsend, who wavered on the tax question before ruling out any new tax other than on tobacco and alcohol, has in the past declined to take a position on a possible gas-tax increase.
Yesterday, however, she said she did not plan on such an increase. "It is not part of my plan," she said.
The higher gas tax generating added annual revenue of about $29.5 million for each penny of the increase would not impact the anticipated $1.7 billion budget shortfall. Most of the gasoline tax goes into the transportation fund. However, the budget crunch probably rules out using general fund revenue to supplement the transportation fund, making the gas-tax increase more attractive.
The 23.5-cent gasoline tax and the added 18.4-cent federal gas tax made the average price of gas in Maryland yesterday about $1.46, compared with $1.40 in Virginia and $1.47 in the District. The national average yesterday was $1.46.
Lon Anderson, a spokesman for AAA, said yesterday that because Maryland already has higher gas prices than Virginia, a further increase could result in economic competition with that state. However, he added, Maryland is also out of options on raising funds for transportation projects and a gas-tax increase could be the best way to go.
"But we would support it only if they plan to put it towards transportation funds. Right now, we clearly don't have that promise in Maryland, and it has been broken before in Virginia," he said.
Maryland Transportation Secretary John Porcari, in testimony last month before the Commission on Maryland's Fiscal Structure, said that a 5-cent to 10-cent gas tax increase would be necessary to shore up the Transportation Trust Fund.
A full report from the commission is due in December, and many legislators are refraining from public comment on the gas tax until then.
"The discussion is out there and the push by some to get it done has been very strong," said state Senate Minority Leader J. Lowell Stoltzfus.
The Eastern Shore Republican said he opposes a gas-tax boost, but other "no-tax" lawmakers, he said, are wavering. Many legislators might see no alternative, with a low transportation fund and an anticipated budget crunch threatening major road projects.
"If there is any tax that is most agreeable to most people, it is a gas tax," Mr. Stoltzfus said.
Maryland's gasoline tax, the 12th-highest in the country, has not increased in 10 years, when it jumped 5 cents in May 1992. That was the first increase in five years.
A 10-cent increase next year would give Maryland the nation's highest gas tax, exceeding Rhode Island's 29-cent tax by 4.5 cents. A 5-cent increase would elevate Maryland to second-highest, tax increases in other states notwithstanding.
Regionally, Pennsylvania's 26.6-cent gasoline tax and West Virginia's 25.35-cent tax are higher than Maryland's current gas tax. Delaware collects half a penny less, the District 3.5 cents less and Virginia 6 cents less, according to the Federation of Tax Administrators.
Delegate Sheila Ellis Hixson, chairman of the House Ways and Means Committee, said she expects a proposal for as much as a 10-cent gas-tax increase, and possibly proposals for other tax increases, when the General Assembly convenes in January.
"I wouldn't be surprised, that seems to be the most talked-about tax increase," said Mrs. Hixson, Silver Spring Democrat. "All taxes are going to be considered."
She said raising the gas tax is considered by many legislators to be the most pain-free tax increase.
"I think history has proven that the tax we get the least amount of negative reaction to is the gas tax, because [the public] sees it as a user fee because of the use of the roads and the bridges," she said. "They can go around and see it getting done."
State Sen. Roy Dyson, Great Mills Democrat, said it appeared a bit "premature" to talk about a gas-tax increase, adding that he would oppose it right now.
He said he would like to consider all options on hand before discussing a gas-tax increase. "Right now, I don't want to see it. I don't see any reason for it."
The gas tax, and taxes on diesel and other fuels, account for 21 percent of the transportation fund. Federal aid is the largest source of money for the fund, and the rest comes from motor vehicle taxes and fees, transit and airport fees, corporate taxes and proceeds from bond sales.
The transportation fund gets about 70 percent of the tax revenue and the remainder is split between Baltimore, the state's 23 counties and various municipalities for local highway projects. A small portion of the gas tax, 2.2 percent, goes to the Department of Natural Resources for Chesapeake Bay programs and 1 percent goes to the Motor Fuel Division of the Maryland Comptroller's Office to cover the cost of collecting the gas tax and inspections of service stations.

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