Governor O’Malley Seeks Business Community Support for Increased Transportation Funding

During the Maryland Chamber of Commerce’s annual meeting, Governor O’Malley asked the membership to support increased funding for transportation infrastructure.  The Governor’s comments were very similar to those given during a round table discussion that was held last week.

As reported by the Baltimore Business Journal:

O’Malley stressed the importance of investing more state money in roads and transit projects, but he also emphasized that the solution will have to be more diverse than simply an increase in the state tax on gasoline. The General Assembly is readying for a fall session that will ostensibly focus on Congressional redistricting, but is also expected to tread heavily on transportation issues.

Business support will weigh heavily in those discussions, as they will likely involve some form of tax increase. The gas tax hasn’t been increased since 1993, and the recession’s tolls on state revenues have left lawmakers with a $1.4 billion gap in the state’s long-term transportation investment budget, O’Malley said. Maryland charges 23.5 cents per gallon of gasoline in taxes.

As reported by the Washington Post, the Governor is exploring revenue options in addition to the gas tax.

But O’Malley suggested Wednesday that raising the gas tax alone would not go far enough, calling it a “declining revenue source” as new cars and trucks get better mileage, a greater number of workers telecommute and others turn to public transit. “What the fairest and best mix of [revenue] choices is, I can’t tell you that right now,” O’Malley said after his speech.

In a letter to state Comptroller Peter Franchot last week, O’Malley also floated the possibility of enhancing the state’s ability to collect sales and use taxes from online purchases. The governor asked the comptroller to investigate “the severity of this ‘loophole'” and cited an academic study that estimated Maryland loses more than $160 million in unpaid taxes from online sales.

Maryland businesses, he wrote, may be “unfairly disadvantaged by what amounts to an uneven playing field with their online competitors.”

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