House panel kills gas tax increase Road projects to halt, Schaefer aides warn

March 20, 1991|By John W. Frece | John W. Frece,Annapolis Bureau of The Sun

ANNAPOLIS -- The House Ways and Means Committee voted unanimously last night to kill Gov. William Donald Schaefer's proposed gas tax increase, a decision that Schaefer aides said will mean no new road construction in Maryland for the next 18 months to two years.

"People can expect no new roads, no major road improvements, no bridge repairs," except for emergency and safety improvements, said Paul E. Schurick, the governor's press secretary. "The program is already shut down now. This will keep it shut for at least two years."

The bill would have raised the state's gas tax by 6 1/2 cents per gallon on June 1 and later replaced that increase with a 5 percent sales tax on the retail price of gas, including current federal and state taxes. It also would have increased more than 110 motor vehicle fees, including car and truck registration fees, to raise $1.5 billion over the next five years.

Department of Transportation officials pleaded poverty, saying that a decline in titling tax receipts and other transportation revenue had left the Transportation Trust Fund facing an estimated $583 million deficit over the next five years and no money for major road widening, bridge redecking or similar projects.

But members of the House committee, restrained by a pledge from House Speaker R. Clayton Mitchell Jr., D-Kent, to avoid any major tax increase this session and reluctant to raise taxes after last year's elections, killed the proposal without discussion.

Although a companion gas tax bill is technically alive in the Senate, Budget and Taxation Chairman Laurence Levitan, D-Montgomery, said there was little interest in bringing it to a vote.

"There is more support for the gas tax package in the Senate, but it's just going to die again in the House. It would be a useless act," he said.

O. James Lighthizer, the secretary of transportation, said he was disappointed but added, "It is not the end of the world, and I don't want to suggest it is."

However, he said he worried that the "construction industry in particular is going to be very hard hit."

Although road projects will be halted, the Central Light Rail line from Glen Burnie through Baltimore to Hunt Valley will continue on schedule, Mr. Lighthizer said.

"We've elected to make that a transportation priority over every other thing in the state. That decision was made before I became secretary. I support that," he said.

Governor Schaefer, Mr. Schurick said, is worried about the effect of an 18-to-24-month work stoppage on efforts to attract businesses and industries to Maryland.

"We tout Maryland all over the United States and all over the world as an excellent place to do business. Businesses rely on modern transportation systems. This sets back our economic development efforts as well," he said.

Until this week, it seemed possible the House committee might go for an increase in motor vehicle fees that would raise an estimated $40 million next year and bridge the gap until the 1992 General Assembly could reconsider the gas tax issue.

But Mr. Lighthizer said the compromise fell apart when he was pressed by House leaders to use the $40 million to leverage as much as $170 million in borrowing to pay for various road projects. Without any assurance that a gas tax increase would be approved next year, he felt such borrowing would be excessive.

The legislature's decision, he said, "means Maryland's transportation system will be on hold indefinitely. We should be able to do the bare minimum maintenance on the system, but no progress of any moment is going to be made."

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