State proposes adding 6 1/2 -cent gas tax Auto registration fees would rise 25 percent

February 12, 1991|By John W. Frece | John W. Frece,Annapolis Bureau of The Sun Doug Birch of The Sun's metropolitan staff contributed to this article.

ANNAPOLIS -- Marylanders would pay an additional 6 1/2 cents for a gallon of gasoline beginning June 1 under the Schaefer administration's proposal to pump $1.5 billion into the state's depleted Transportation Trust Fund over the next five years, administration officials said yesterday. The proposal ultimately establishes a 5 percent sales tax on the gallon price in Maryland that already includes an 18 1/2 cent state tax and a 14.1 cent federal tax.

The tax proposal submitted to the General Assembly last night ** dTC was accompanied by across-the-board increases in more than 110 different Motor Vehicle Administration fees, including a 25 percent boost in annual vehicle-registration fees, from $27 to $34 a year for most passenger vehicles.

Fees for many MVA services, some of which have not been changed for 40 years, would be increased in an attempt to recover the cost of providing the services, Department of Transportation officials said.

A driver's license renewal that now costs $6 would go up to $20, and the fee for transferring tags from one car to another would go from $1 to $10. DOT officials said the higher fees would make Maryland's fee structure comparable to that in neighboring states.

"If we have a fee, we've raised it," said one administration official.

O. James Lighthizer, the state's new secretary of transportation, said that without a major infusion of new revenue and the increased borrowing authority that goes with it, virtually all road, bridge and other transportation construction in Maryland would halt for at least the next 18 months.

Details of the gas-tax legislation were made available as the administration prepared to introduce it in the General Assembly last night.

The administration also readied for introduction its 123-page Linowes commission bill containing the tax restructuring recommendations of the governor's commission. The proposal -- formally referred to as the Tax Fairness Act of 1991 -- would raise more than $800 million in new taxes the first year alone, with proceeds distributed primarily for education, transportation and infrastructure improvements and to help the poorest jurisdictions most.

David S. Iannucci, Gov. William Donald Schaefer's chief legislative officer, said Mr. Schaefer wants both tax bills passed this session.

"They are completely linked . . . He will be completely unsatisfied if one goes through and not the other," he said.

By linking the two bills, Mr. Schaefer appears to be demonstrating his concern that if the gas tax passes, he will no longer have the leverage to prompt traffic-clogged jurisdictions such as Montgomery County to support the Linowes bill, which primarily benefits Baltimore.

While the gas-tax proposal seems to be gaining general support in the legislature despite continued opposition from House leaders, the consensus on the Linowes proposal is that it is so all-encompassing it cannot be adequately considered this session and must be sent to summer study.

The Linowes tax commission recommended raising the state's sales tax to 5 1/2 percent from 5 percent; making the personal income tax more progressive by levying higher taxes on those who earn more; establishing a 2 percent annual tax on the value of cars and boats; and simplifying the property-tax system and returning millions in new revenue to the local jurisdictions for a one-year-only property-tax relief.

In unveiling the gas-tax legislation yesterday, the administration explained for the first time that the sales tax would be included in the retail price of a gallon of gasoline rather than calculated on top of the price at the pump. The tax would be figured on an average price of gasoline, updated quarterly.

"We're not trying to hide anything. It's just abundantly more convenient," Mr. Lighthizer said. "When [a motorist] goes to the gas pump, he's not going to experience anything."

The 5 percent tax is expected to raise $954 million over the next five years. The higher car and truck registration fees are 'N projected to bring in another $200 million, and the increase in other MVA fees is expected to raise $339 million.

Maryland faces a $583 million deficit in its transportation budget over the next 5 1/2 years. That has jeopardized some $1.2 billion in planned road, rail and aviation projects, everything from bridge replacements to adding new lanes to U.S. 50 between Annapolis and Washington. Mr. Lighthizer said about a third of the money that would be raised would be spent to cover that gap.

The remaining two-thirds would be divided between redecking or repaving existing bridges and roads and a "modest" expansion of capacity of other existing roads, the secretary said. Some funds also would be used to plan more mass-transit projects.

But William F. Zorzi Sr., lobbyist for Maryland's chapter of the American Automobile Association, said his organization's half-million Maryland members will support the tax increase only if the proceeds are earmarked exclusively for road and bridge uses.

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