- The Washington Times - Sunday, October 26, 2003

ANNAPOLIS — Transportation Secretary Robert L. Flanagan likes to call the time and money Marylanders waste locked in traffic jams on the state’s highways a “congestion tax.”

For motorists whose nerves are frayed and whose patience has been sapped by daily struggles on crowded roads, Mr. Flanagan makes this pledge: The Ehrlich administration is going to cut the “tax” by boosting highway construction. Mr. Flanagan’s staff has proposed adding $4.7 billion in projects to the capital construction program over the next six years to alleviate congestion.

But there isn’t enough money in the state’s transportation trust fund to pay for the projects, and that creates a problem for the Ehrlich administration.

Mr. Flanagan’s staff estimates that the state would need a minimum of $300 million a year to cover the cost of bonds that would be sold to finance additional construction projects. That means the administration is likely to have to increase motor-vehicle fees or taxes.

Republican Gov. Robert L. Ehrlich Jr. has trod cautiously around the issue of raising taxes or fees. But Mr. Flanagan’s comments at a meeting last week of the governor’s Transportation Task Force were an indication that the administration is prepared to endorse some revenue measures.

During his campaign, Mr. Ehrlich acknowledged that more money would be needed for highways. He ruled out increasing the sales or income taxes, but he did not make a similar pledge on the taxes and fees that underwrite the transportation system.

The administration says it inherited a major highway problem from former Gov. Parris N. Glendening, Democrat, who refused during his eight years in office to increase the gasoline tax despite support for the move within the legislature and the state’s business community. Mr. Glendening also focused on mass transit and highway improvements rather than building roads.

“There is a feeling in this administration we have waited too long” to address transportation problems, Mr. Flanagan said. “We have to get down to business.”

Mr. Ehrlich compounded the fiscal problem with his plan to borrow $300 million from the transportation fund to help balance the state budget. He has pledged to restore that money, and is supposed to tell the legislature in December how he will do it.

Maryland’s current six-year transportation plan would provide funding for projects worth about $6.6 billion, far short of the $17 billion in construction that the Department of Transportation believes the state should undertake during the period to improve the transportation system.

Even if the governor and the legislature agree to spend the additional $4.7 billion recommended by the department, only two-thirds of the projects would be finished. But department officials see that as a reasonable compromise between what they would like to do and what is possible, given limited financial resources.

The document given to the task force also offered a menu of tax and fee increases that could be used to raise the $300 million needed to add projects to the construction program.

A 5-cent increase in the gas tax would bring in $159 million a year and a 10-cent increase would garner $318 million, enough to pay for the program. The current tax of 23.5 cents a gallon has not been increased since 1992.

Mr. Ehrlich said during his gubernatorial campaign and in an interview after the election that the tax would probably have to be increased, but it seems to have since fallen out of favor with the administration.

“The governor has not been terribly positive about increasing the gas tax,” Mr. Flanagan said at the task force meeting.

An increase from 5 percent to 6 percent in the titling tax that Marylanders pay when buying a car would bring in $145 million a year. Another option, increasing the sales tax a quarter of a percent, would bring in $146 million annually but would run counter to Mr. Ehrlich’s pledge not to increase sales or income taxes.

Another potential source is the motor-vehicle registration fee, now $81 for two years. Raising it to $121 would bring in $100 million in additional revenues; an increase to $201 annually would bring in $300 million.

The task force plans a series of hearings before voting on its recommendations to Mr. Ehrlich on how to raise the necessary $300 million.

Sen. Patrick J. Hogan, Montgomery Democrat and a member of the task force, said he would like some signal from Mr. Ehrlich as to which fees or taxes he is willing to increase.

“Why should I study the menu if I don’t know what the chef will cook?” Mr. Hogan asked.

Any increase in revenues would have to be approved by the General Assembly, and Mr. Ehrlich’s big problem there may be within his party, where there is strong opposition to tax increases.

Senate Minority Leader J. Lowell Stoltzfus, also a member of the task force, said Republicans know a good transportation system is important for constituents and is necessary for a healthy economy. Republicans also are generally more amenable to increases in transportation revenues than other tax hikes, he said.

But Mr. Stoltzfus also said there would be a great deal of reluctance to increase the gas tax among Republican lawmakers.

A majority of Democrats will likely be willing to vote for tax or fee increases for transportation, but Democratic leaders want Mr. Ehrlich to take the lead.

“Nobody from his own party is willing to step up,” House Speaker Michael Busch said.

Democrats don’t want to take the initiative to increase taxes to pay for Mr. Ehrlich’s transportation program only to have Republican legislators beat up on them in the next election for supporting higher taxes, Mr. Busch said.

Mr. Stoltzfus said the most acceptable alternative to Senate Republicans might be to increase fees, not taxes.

Mr. Busch joked that the solution may be to rename the gas, sales and income taxes “fees.”

“Then maybe the governor’s party will support it,” he said.

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