Tax us more.
That was the message from business leaders and county administrators testifying Wednesday in favor of Gov. Martin O?Malley?s proposed gas tax increases to support transportation improvements and attack the state?s $1.5 billion structural deficit.
O?Malley wants to raise the gas tax to adjust for inflation?s effect on construction costs, starting with a half-cent increase Jan. 1. Combined with other revenue raisers, his plan would net $400 million in dedicated dollars for the state?s transportation trust fund and help address a $40 billion backlog of transit projects.
But many, including representatives of business groups, said even higher increases are necessary.
“It?s not enough,” said Montgomery County Executive Ike Leggett. “Four hundred million dollars a year will merely allow Maryland to tread water.”
Testifying at joint hearing of three fiscal committees, state Transportation Secretary John Porcari said indexing is “essential” to preserve Maryland?s aging system, which includes two bridges nearly 70 years old.
As federal funding decreases, costs for resurfacing one mile of road has soared since the state?s 23.5-cent gas tax was last increased in 1993, he said.
“We know we are asking for a significant amount of money,” Porcari said. “We would not be asking for it unless all of us here didn?t believe it is absolutely critical to the state?s future and economy and the quality of life we have.”
O?Malley is also proposing increasing the vehicle titling tax from 5 percent to 6 percent, directing all rental car sales tax to the transportation fund, and dedicating half of a corporate income tax increase to the fund.
Some Republican lawmakers noted that the plan does nothing to address the state?s deficit. Legislators from Maryland?s rural counties said they fear new revenues will be spent on mass and urban transit projects that won?t benefit their constituents.
“What you?re hearing are paid lobbyists,” said Sen. Alan Kittleman, of Carroll and Howard counties. “Main street Maryland opposes the gas tax increase because they know they will pay more for gas and also more for their goods.”
Several from the gas station industry testified against the proposal, but representatives of the Maryland Chamber of Commerce, the Greater Baltimore Committee, the Montgomery County Chamber and the Washington Board of Trade spoke for even higher taxes.
“Inadequate transportation funding represents the most significant challenge to Maryland?s economic growth over the next decade,” said GBC President Donald Fry.
A group representing car dealers said they would be willing to support a titling tax increase, but only if applied to the difference between the sales price of a car and the customer?s trade-in.
