A Maryland commission is recommending that Maryland raise gas taxes, tolls and parking rates to help the state collect $800 million more annually to pay for its backlog of transportation projects. The 28-member panel told lawmakers Monday to generate $600 million in new revenues and provide another $200 million in bond sales for the state’s transportation trust fund, which pays for infrastructure projects such as road and bridge repair.
The panel, called the Blue Ribbon Commission on Maryland Transportation Funding, suggested increasing vehicle titling taxes, driver’s license fees, transit fees, the sales and use tax, the gas tax and the corporate income tax to help raise new revenues.
| Commission recommendations for new revenues include: |
| » Increase gas tax by 1 to 15 cents |
| » Increase vehicle registration fees by $20 to $60 |
| » Apply sales tax to the net price of gas rather than pretax amounts |
| » Increase vehicle titling taxes by 1 to 1.5 percent |
| » Increase driver’s license fees by $10 |
| » Increase transit fees by 25 percent |
| » Increase tolls by 25 cents |
| » Increase corporate income tax by 1 percent |
| » Increase sales and use tax by .25 percent |
“We know that it’s going to take several of these items in terms of fees and taxes to reach the numbers that we need to rebuild the Transportation Trust Fund,” said Gus Bauman, the commission’s chairman.
The recommendations also immediately would restore $350 million to state funding for local road repair.
O’Malley’s borrowing has slashed locals’ share of transportation funding by roughly 95 percent in the last three fiscal years.
The panel also recommended a constitutional amendment that would ban state officials from dipping into the trust fund to help plug annual budget deficits.
Gov. Martin O’Malley has drained the fund of $700 million to help plug budget deficits over the last two fiscal years, and his most recent budget proposal would withdraw another $100 million.
But voters must approve any constitutional changes in the November 2012 general election, so the panel has recommended an immediate law that would require state officials to repay borrowed transportation funds.
Maryland lawmakers have been borrowing from the transportation fund to help close budget shortfalls since 1984. In 2003, the state stopped restoring new withdrawals, and roughly $1 billion now remains unpaid.
The Maryland Department of Transportation has been issuing more bonds to keep pace with spending and replace its disappearing cash flow, increasing the fund’s outstanding debt from $1.6 billion in fiscal 2010 to $2.5 billion in fiscal 2016, according to the state’s budget analysts.
In the meantime, the agency’s debt service payments are expected to grow 91 percent from $151 million in fiscal 2010 to $288 million in fiscal 2016.
