ANNAPOLIS -- A Maryland Senate panel on Wednesday considered proposals to raise money for the state's nearly bankrupt transportation fund, including one from the Senate president that would levy a sales tax on gasoline, allow counties to create their own gas taxes and create regional transit authorities that could raise property taxes in Baltimore City and Montgomery and Prince George's counties.
Senate President Thomas V. Mike Miller Jr., D-Prince George's and Calvert counties, called his measure a "menu of options" but insisted that Gov. Martin O'Malley needs to take leadership on a solution to fund roads, bridges and rail projects.
Miller's bill would levy a 3 percent sales tax on gasoline, allow counties to raise the current 23.5-cent-per-gallon gas tax by up to 5 percent and allow the transit authorities to increase property taxes. It also calls for a study on leasing the Intercounty Connector.
Gas is currently exempt from the state's 6 percent sales tax. However, the Transportation Trust Fund is slated to go bankrupt by 2018. The fund is so depleted that the state did not contribute any projects to the region's long-term transportation plan tentatively approved by the National Capital Region Transportation Planning Board on Wednesday, according to Transportation Planning Director Ron Kirby.
Miller also proposed a constitutional amendment to create a "lock box" to prevent lawmakers from using Transportation Trust Fund money for anything but transportation.
Other bills discussed before the Senate Budget and Taxation Committee included measures to allow cities and counties to levy a 2 percent sales tax on gas, put a statewide 2.1 percent sales tax on gas and increase the sales tax on all goods by half a cent. None of the bills would raise the statewide gasoline tax.
Montgomery County Executive Ike Leggett testified in favor of Miller's proposal but said he favored a statewide tax increase instead of raising taxes in the communities where the Purple and Red Line light rails would be built.
A group of service station owners testified that any increase in taxes on gasoline would damage their already hurting businesses.
"I'm not making any money, I'm not increasing salary. It hurts," said Frank Eberle, owner of a Severn Sunoco station.
A report released by a Maryland economic policy group Wednesday and commissioned by conservative think tank Americans For Prosperity Foundation-Maryland showed that any increase in gasoline-related taxes would net the state hundreds of millions of dollars, but at the cost of hundreds of jobs and millions of dollars in economic activity.
The report, by Sage Policy Group Inc. in Baltimore, shows a 3 percent sales tax on gasoline would cause the loss of 959 Maryland jobs and $124.4 million in economic activity. It showed higher increases would cost more in jobs and economic activity.