Under a plan worked out between lawmakers and the Schaefer administration to keep the state from losing federal highway funds, the General Assembly will decide at a special session later this month whether drivers should pay more for licenses, titles, tags and other services.
House Speaker R. Clayton Mitchell Jr., D-Eastern Shore, the last key legislative opponent of the fee increase, agreed yesterday to support a measure that would produce $40 million in new revenues.
The Maryland Department of Transportation says it needs that much in matching funds -- at least temporarily -- to secure another $312 million in federal highway money.
Mitchell said he reluctantly agreed to the plan because he believes the transportation budget, although hard hit by project costs and a drop in revenues, still has enough money to meet the federal grant requirements.
But Gov. William Donald Schaefer and Transportation Secretary O. James Lighthizer lobbied persistently to convince Mitchell that the well at the agency is nearly dry.
They argued that the state needs about $60 million to secure federal funds for highway and bridge construction. As much as half of that $60 million will be due by the early summer of 1992, when bills for the projects begin coming in.
Mitchell said yesterday that he had no alternative but to agree to the fee increase.
"I still think there's money there to do it [save the federal funds]," he said, "but I'm not going to sit here and go down to the deadline."
The agreement does not specify what fees are to be raised. Mitchell said he wanted to give the Schaefer administration the flexibility to use a combination of fee increases and other revenue sources -- including future bond sales for the state's light-rail project -- to raise enough money to keep the federal funds flowing.
Legislation detailing how the money will be raised will be sent to lawmakers, who are scheduled to return to Annapolis June 26 for special budget session. Similar legislation passed the state Senate during the regular 1991 session, which ended in April, but it was killed in a House committee at Mitchell's instructions.
In return for Mitchell's support on the MVA fees, Lighthizer agreed to begin authorizing new highway projects when the fee increases are approved. He had put a moratorium on new construction projects in November because of a drop in transportation revenues.
The speaker said he will ask the House to consider a gas tax increase in 1992 if Lighthizer presents a new transportation plan showing how the money will be spent.
Mitchell said lawmakers would "make a good-faith effort to try to find the funds necessary to complete that plan" if it met with local and legislative approval.
If the MVA fees issue is resolved at the special session -- as many believe it will be -- it will eliminate a major source of friction between Schaefer and the legislature.
The fee measure approved by the Senate would have raised the cost of renewing a driver's license from the current $6 for a four-year license to $20 for a five-year license.
The proposal would have increased the cost of a new car title certificate from $1 to $12, increased tag transfer fees from $1 to $5 and raised the price of a learner's permit from $22 to $25. That plan would have brought in $42 million a year.
State transportation officials said some of the fees have not been raised in decades, while services have been expanded. As a result, they said, the MVA was recouping less and less of the cost of its services.
For example, they noted that MVA revenues paid for 84 percent of the agency's operating expenses in 1955, but covered only 33 percent of the cost last year.
As for the gasoline tax, the current federal tax is 14 cents a gallon and the state tax is 18.5 cents a gallon.