O. James Lighthizer, Maryland's newly appointed transportation secretary, supports raising up to $1.5 billion in transportation revenues through new taxes and fees during the next five years.
Lighthizer, tapped by the governor for the post this month, said a $1 billion or $1.5 billion revenue increase would be a "realistic" way to make up for a projected revenue shortfall and to pay for maintenance and other essential transportation needs.
Because of the current economic downturn and unrest in the Middle East, state officials project a $521 million shortfall in transportation revenues over the next five years.
"It's not an overstatement to say that the situation is grim," Lighthizer said last night.
"We're in a position where if we don't have revenue enhancements, we're going to go backward."
Transportation officials presented the governor's 15-member Transportation Revenue Committee yesterday with several ways to raise revenues by $500 million, $1 billion, $1.5 billion or $2 billion.
The alternatives included, among others, an unspecified increase in the state's current 18.5-cents-a-gallon gasoline tax, a higher vehicle excise tax, a new 5 percent sales tax on fuel and higher fees on auto registrations, trucks and driver's license renewals.
For example, to raise $500 million, lawmakers would have to adopt the equivalent of a 5.5-cents-a-gallon increase in the fuel tax; to raise $1 billion, the equivalent of 8.5 cents a gallon more would have to be adopted. The equivalent of a 16.5-cents-a-gallon increase would enable the state to raise $2 billion. However, transportation officials did not recommend that fuel-tax increase be the sole source of new revenue, nor did they made any specific recommendations on how money should be raised.
Lighthizer offered no suggestions as to which new or higher fees and taxes the state should adopt to raise additional money.
Although acknowledging that any tax increase will be politically unpopular now, Lighthizer and others believe something must be done to shore up the transportation trust fund, which has been hurt by the national economic slump.
"I believe the transportation trust fund in some fashion has to be replenished," said Senate President Thomas V. Mike Miller Jr., D-Prince George's County. "The state cannot stop moving forward in terms of light rail, roads and bridges and maintaining infrastructure."
Even with $500 million in new revenues for planned construction LTC projects, transportation officials said, the state would not have enough money to pay for some maintenance and other projects over the five-year period.
On Dec. 8, Gov. William Donald Schaefer put a freeze on the start of new road construction projects as analysts projected that the transportation trust fund would bring in $206 million less in anticipated revenue from taxes and vehicle titling fees during the next 18 months.
More than 70 projects, such as U.S. 50 improvements in Anne Arundel County and bridge improvements on Interstate 695 in Baltimore County, were put on hold for 30 to 45 days. Meanwhile, transportation officials are deciding which of those projects could go forward and which could be deferred indefinitely, said Stephen G. Zentz, deputy transportation secretary.
Transportation officials say they need $4.1 billion to accomplish all their goals during the next five years, although no one at yesterday's meeting talked of raising that amount of money.
Some legislators on the Transportation Revenue Committee showed the most interest in the proposal to raise $1 billion.
Sen. John Cade, R-Anne Arundel, said, "I don't think you can realistically expect a lot of support for any revenues beyond $1 billion. In fact, that number itself may be difficult to attain."