Transportation plans could include sales tax hike -- Gazette.Net


A transportation funding proposal is expected to be one of Gov. Martin O’Malley’s top legislative priorities in the upcoming session.

The governor, who has yet to unveil his 2013 General Assembly agenda, told reporters earlier this month that a pair of proposals to raise transportation revenue via the sales tax could resurface.

Last year, the administration proposed phasing in a 6 percent sales tax on gasoline, but the issue was “kicked to the side in order to make room for the throw-down fight about gaming,” O’Malley (D) said.

Another idea was to raise the state’s overall sales tax by one penny and funnel the added revenue to transportation projects.

That increase could generate about $770 million, O’Malley said, adding that he expected the overall sales-tax increase would be more palatable to Marylanders than a gasoline sales tax.

A state Blue Ribbon Commission recommended in late 2011 that Maryland raise an additional $870 million annually to put toward transportation projects.

Since the economic downturn began in 2008, $947.5 million in Highway User Revenues — intended to pay for local road repairs — has been diverted to balance the state’s budget. Transportation advocates have called for the state to repay that money, and the administration says restoring Highway User funding is a priority.

But House Speaker Michael E. Busch (D-Dist. 30) of Annapolis has warned that getting a solution through the legislature likely would require cooperation from different regions of the state — each of which may have different priorities.

Lawmakers from the state’s rural counties have expressed concern that their residents’ taxes will end up paying for transit projects like the Purple Line light-rail project that they will never use.

The Purple Line would run 16 miles between Bethesda in Montgomery County and New Carrollton in Prince George’s County and would connect with existing Metro, MARC, Amtrak and bus lines.

One way to court support for new transportation revenue — such as the sales tax on gasoline — could be to suggest phasing-in an increase that allows local jurisdictions to keep a set portion of the revenue that is raised, according to Sen. Roger Manno (D-Dist. 19) of Silver Spring, who has proposed such a measure in the past.

“How do they say ‘no’ to that local money?” Manno said.

But some observers predict diminishing returns from taxes tied to gasoline sales.

As hybrid and electric cars become more prevalent, gas tax revenues are expected to shrink, and the state will need to tie revenues to the distance vehicles travel, rather than the amount of gas they use, according to Neil Bergsman, director of the nonprofit Maryland Budget & Tax Policy Institute.

A pilot program in Oregon concluded in 2007 that such a system was feasible, and the state recently began a second study to examine different methods of assessing a fee. The options include using a GPS device to track distances traveled, including a mileage fee in gas-station fuel bills or paying a flat fee instead of a per-mile charge.

Maryland has not conducted a vehicle-miles-traveled study of its own, according to the state Department of Transportation.