The Maryland Senate’s budget committee is examining tax and fee increases that would generate much-needed revenue for the state’s depleted transportation fund, as lawmakers prepare to head into an October special session at least $800 million short of what they need to meet Maryland’s transportation needs.
Legislative analysts plan to provide the Senate Budget and Taxation Committee with a menu of proposals on Wednesday that would generate transportation revenue. The proposals include increasing the state’s 23.5-cent-per-gallon gas tax, imposing a 6-percent tax on the sale of gasoline, and raising registration, licensing and titling fees. The budget panel also will examine a regional sales tax that would be applied to counties that are directly affected by mass transit such as Montgomery and Prince George’s counties, according to Warren Deschenaux, director of Maryland’s Department of Legislative Services.
Lawmakers have unsuccessfully tried to pass similar measures to replenish the transportation fund, which Gov. Martin O’Malley has repeatedly raided to help plug annual billion-dollar budget gaps.
O’Malley has drained nearly $700 million from the fund — which pays for all road and rail maintenance — since fiscal 2009 and he recommended another $100 million fund transfer in his fiscal 2012 budget, when the state was facing a $1.6 billion shortfall.
Now time is running out for the General Assembly to take action on returning money to the state’s transportation coffer.
The state is facing a budget shortfall of at least $1 billion next year and O’Malley’s 28-member commission on transportation funding has recommended a minimum infusion of $800 million annually to meet the state’s most basic transportation needs.
A 10-cent increase to the state’s gas tax, which was supported last session by 14 senators and 37 delegates, would generate more than $300 million in additional revenues annually.
If Maryland instead added a 6 percent sales tax on gasoline, which currently has no sales tax, the state would generate an additional $580 million in extra revenue each year, according to budget analysts.
Before the state starts bringing in more transportation revenues, however, some lawmakers and transportation officials want to make sure that no elected officials can get their hands on the money when state funding runs dry.
But the Maryland Budget and Tax Policy Institute, an independent think tank, says the state must have the capacity to draw from all of its revenue sources in time of severe budget pain.
“We want to make sure the general fund is dealt with first,” said Branden McLeod, associate director of the institute. “The only way we would support new revenues for the transportation fund, is if lawmakers came up with new revenues for the general fund as well.”
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