Local Officials Discuss Transportation Issues, Gas Tax Hike

Today, Governor Martin O’Malley is hosting a roundtable discussion with lawmakers and key transportation officials from around the state to review statewide transportation issues, including how to pay for much needed infrastructure requirements.  Amongst the concerns confronting local governments is the possibility of a gas tax hike. This past session, legislation was introduced by Senate Majority Leader Robert J. Garagiola to increase the gasoline tax by 10 cents a gallon (25 cents to 35 cents) as a means to generate revenue for the State’s Transportation Trust Fund. The Gazette reports:

However, as gas prices continue to climb, a tax hike wouldn’t be well received, Garagiola (D-Dist. 15) of Germantown acknowledged. “If we were to have a vote today, I would be hard-pressed to say that you would get a majority supporting a gas tax,” he said.

Gas in Maryland currently sells for $3.90 per gallon, more than a dollar higher than at this time last year, according to AAA public affairs manager John Townsend. Maryland is just 15 cents below its highest-ever gas price of $4.05, set in June 2008.

Howard County Executive Kenneth S. Ulman, a member of the Blue Ribbon Commission, plans to attend the roundtable. He and other cash-strapped county executives have pushed for a tax increase to replenish highway funding.

In Howard County, where Ulman (D) has created a new transportation director position into his budget, officials are focused on road-widening projects along Interstate 70 and state Route 32 and U.S. Route 29.

Meanwhile, in Harford County, where local highway funds were cut by $16 million between 2008 and 2010, County Executive David Craig (R) said he is concerned about transportation money being directed toward mass transit systems in Baltimore and the Washington, D.C., suburbs.

“I do support trying to get [the transportation money] back in as much as possible, but when it comes to the gasoline tax, I don’t see many delegates and many senators being supportive of it,” Craig said earlier this year.

Ulman stated:

“What I can say is the leaders of the largest jurisdictions in the state have come out in favor of it,” he said. “We have come out in favor of supporting a firewall [protecting] the transportation trust fund. I think that’s an important piece of whatever solution comes out of it.”

During the meeting, County Executive Ulman presented the recommendations from the Blue Ribbon Commission on Maryland Transportation Funding and members of the Commission discussed them with the Governor.  Major recommendations discussed included:

  • enacting a constitutional amendment, or “firewall” so funds cannot be used for any other purpose or an approach where a fiscal emergency is declared and a 3/4 vote of each house is required by each house of the General Assembly before allowing a transfer of money from the Transportation Trust Fund (TTF) to the General Fund;
  • retaining the existing portion of sales tax and corporate income tax revenue that is dedicated to transportation in the TTF; and,
  • restoring Highway User Revenues to local governments.

During the session, the General Assembly approved a one-time increase of $13.3 million ($5 million for counties and $8.3 million for municipalities) for local roadways and adopted a statutory provision to require a five-year repayment plan for any future transfers of TTF revenues to the General Fund.  It also approved keeping the sales tax and a portion of corporate income tax revenue in the General Fund and retaining HUR in the TTF instead of transferring it to the General Fund.  As the Commission continues its work, it will determine if the firewall provision goes far enough, how to provide ongoing revenue for local roadways, and whether the sales tax and corporate income tax should remain in the TTF.

Governor O’Malley asked whether the Commission considered giving local governments the ability to impose their own gas tax.  The Commission did not consider this in discussions thus far, but County Executive Ulman replied, “we have one intertwined system and [such an approach] could cause inequities.”

As the Governor wrapped up the session, he commented that we need solutions for now and the future.  A gas tax may be good for the environment, but as we become more energy and fuel-efficient, it is not a good funding source overall.  He said, “diversification away from the per gallon must be a part of the solution.”

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