Hike would be added over three years ANNAPOLIS – Maryland Gov. Martin O’Malley said Monday he will strongly consider a 15-cent increase in the state’s gasoline tax, as well as other hikes in transportation-related taxes and fees that a state panel recommended last week.
The increase, which would be added in 5-cent increments each year for three years, would be the state’s first increase in the state’s 23.5-cent-per-gallon tax since 1992.
Seeking a way to raise more than $800 million for transportation projects, the Maryland Blue Ribbon Commission recommended the increase in the gas tax, which would bring in an additional $491 million each year. Also on the table are increases in the titling tax, vehicle registration and other Motor Vehicle Administration fees, and fares across all modes of public transportation.
O’Malley is considering backing all of the commission’s revenue-raising recommendations, according to spokeswoman Takirra Winfield.
“We have to look at the long term. We have to look at the investment we make now [for the future],” said Winfield, explaining that in the long run, not investing in transportation infrastructure would be worse than any pressure residents would feel now.
Maryland, which faces a $1 billion general fund shortfall in fiscal 2013, needs $12 billion just to pay for its transportation needs.
But opponents and supporters alike say the gas tax increase would place a heavy burden on residents.
“This would be regressive on an awful lot of moderate- and low-income families,” said state Sen. Edward Reilly, R-Anne Arundel County. “We should not be expanding public transportation. We should not be building new roads. We should be protecting our current infrastructure.”
Although the burden on taxpayers is unfortunate, it’s also necessary, said AAA Mid-Atlantic spokesman Lon Anderson, a Blue Ribbon Commission member.
“Maryland has gotten itself … into such a transportation funding crisis situation that it’s going to take just huge dollars to prevent further deterioration of the system,” he said. “The gas tax is still the real work horse of transportation revenue.”
Still, it is unfair to ask taxpayers to fill the hole created when O’Malley’s administration took nearly $100 million from the Transportation Trust Fund — which pays for all road and rail maintenance — to balance the current year’s budget, Anderson said.
In the two previous fiscal years, O’Malley had drained nearly $700 million from the fund to help plug general fund deficits.
Maryland lawmakers have been borrowing from the transportation fund to help close budget shortfalls since 1984. In 2003, the state stopped restoring new withdrawals.
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.
According to state Sen. David Brinkley, R-Carroll and Frederick counties, increasing the gas tax is the wrong way to raise revenue.
People who live on the state border will leave Maryland to buy their gas, he said, and as the government encourages fuel efficiency, tax revenue will shrink.
He also suggested removing trains from the list of gas tax recipients and instead implementing a regional tax to fund the rail that serves that area.
Western Maryland residents don’t want to pay for the planned Purple Line, which would run 16 miles from New Carrollton to Bethesda or the Baltimore Red Line, which are partly responsible for the cash crunch, he said. The recommended tax increases amount to “war on rural Maryland.”
Hayley Peterson contributed to this report.
