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Maryland must take action to fund needed transportation projects, or it will fall behind Virginia in attracting new employers, backers of a gas tax increase say.

In Virginia, Gov. Bob McDonnell last week proposed replacing the state’s gasoline tax with an increase in the sales tax in order to raise more revenue to pay for transportation projects.

“It’s amazing the difference a river makes,” said Lon Anderson, director of government affairs for AAA Mid-Atlantic.

Even though McDonnell’s plan is controversial, it at least shows he is serious about addressing transportation funding concerns, Anderson said. “In Maryland, our transportation funding crisis is just as bad as Virginia’s but we sit and watch,” he said.

Maryland must act to pay for transportation projects or it will fall behind the competition with Virginia for businesses, said Mathew Palmer, senior vice president for government affairs at the Maryland Chamber of Commerce.

Businesses in both states are hurt by the congested highways of the region, he said. While there has been a lot of talk among legislators in Maryland, no bills have been filed, he said.

“Both states realize transportation funding is a huge need for the business community to grow out of this very trying economy,” Palmer said.

A Blue Ribbon Commission on Maryland Transportation Funding last year proposed a 15-cent increase in the state’s gas tax phased in over three years in order to raise about $870 million annually for transportation projects. The money is needed to repair aging infrastructure and meet the needs of a growing population, Anderson said.

Gov. Martin O’Malley has discussed with legislators how to address transportation revenues, but no specific plans have been put forth, said his spokeswoman Takirra Winfield.

One idea is to increase the state’s sales tax by a penny with the additional revenues dedicated to the transportation fund and another option is the blue-ribbon commission’s gas tax plan, she said.

Last year, however, legislators who earlier had spoken in support of a higher gasoline tax balked after prices approached the $4-per-gallon mark.

“The governor is very considerate of the gas prices, and definitely we will take that into consideration,” Winfield said. “No one has proposed anything yet formally.”

The average retail price of regular-grade gasoline in 2013 is projected to be $3.44 per gallon, according to the U.S. Energy Information Administration’s latest update on Jan. 8.

Gas prices always will rise and fall, but the state has not increased its tax of 23 cents per gallon since 1992, Anderson said. That has not kept up with transportation needs, he added.

“We do believe this crisis in transportation funding is very real, and at some point it’s really going to cost Maryland competitively,” Anderson said.

cford@gazette.net