Proposals to raise the state sales tax and dedicate the money to mass transit got strong support from Montgomery County and Baltimore City officials, commuters and even some Washington area business groups.
But retailers and gasoline dealers were cool to the idea, and it is uncertain that any general tax increases will pass this session.
House Ways and Means Committee Chairman Sheila Hixson, D-Montgomery, asked her committee to approve an increase in the sales tax from 5 cents to 6 cents, and dedicate half of the new revenues to transportation, including a portion for mass transit.
Del. Charles Barkley, D-Montgomery, proposed a similar bill with a quarter percent increase in the sales tax. The bills would generate more than $360 million per year.
“Some folks say let?s wait ?til next year,” Barkley said. While many tax proposals will be on the table to cure looming deficits, “I think we need to take care of one of these issues this year,” he said.
The money is needed for new projects such as Corridor Cities Transit project in the Interstate 270 corridor and the Red Line in Baltimore, Barkley said.
“We?re here to support almost any reasonable initiative,” said Nancy Floreen of the Montgomery County Council.
Baltimore City representative Demaune Miller submitted testimony for the tax hikes, saying “the lack of revenue for transportation projects also significantly impedes the economic growth of Baltimore.”
Andy Scott of the Greater Washington Board of Trade supported the bill, as did the Montgomery County Chamber of Commerce in written testimony. “We would support other revenue sources” as well, Scott said.
Karen Syrylo, tax consultant for the Maryland Chamber of Commerce, said the group supported “the concept of this bill,” but “we don?t support its details.” The chamber supports a more comprehensive approach to examining Maryland?s tax structure.
Tom Saquella of the Maryland Retailers Association said his group opposed using a general fund revenue such as the sales tax to fund just transportation projects, especially since the Legislature “has not increased the gas tax in 15 years.”
“Once you start it you might not be able to stop it,” he said. He described the sales tax as “inherently more regressive,” hitting the pocketbooks of lower-income households more heavily.
