Surge in funds boosts transportation budget But state gas tax increase may be needed in 2 years

November 25, 1998|By Thomas W. Waldron | Thomas W. Waldron,SUN STAFF

Strong revenue growth and an increase in federal funds have given the state transportation budget an unexpected boost, but legislators and analysts say Maryland may still need to raise its gasoline tax to meet future road and transit needs.

The state will be able to spend about $950 million annually on transportation projects and meet projected needs for the next two years, according to an analysis presented to lawmakers last night.

But without new revenues, escalating costs and debt service in 2001 and beyond could force the state to scale back its transportation program, legislative analysts said.

The General Assembly last increased the state's gasoline tax -- a key revenue source for transportation projects -- in 1992.

Even with the healthy budget growth, some key legislators say another boost is needed.

The governor and General Assembly should move to raise the tax next year, said House Speaker Casper R. Taylor Jr., an Allegany County Democrat. "We do not have an adequate revenue stream to keep up with our capital investment responsibilities," he said.

During his first four-year term, Gov. Parris N. Glendening resisted the idea. But recently he has sent signals to some legislators that he would consider a tax increase next year.

John D. Porcari, Glendening's choice to be state transportation secretary in his second term, said this week that the state will enjoy "very strong" budgets for several years, but added that a gas tax increase may be inevitable.

"At some point, we certainly will need a revenue increase," Porcari said.

It remains unclear how big a push there will be to increase the tax when the General Assembly reconvenes in January.

Sen. Barbara A. Hoffman, chairwoman of the Senate Budget and Taxation Committee, said the gasoline tax issue should be taken up only after the state adopts a better plan to address the state's mass transit needs.

In any case, she said the new revenue figures could give the Assembly some breathing room before tackling the politically sensitive subject.

"The way the money is coming in, we don't have to do it this year," said Hoffman, a Baltimore Democrat. "It buys you a year."

Del. Robert H. Kittleman, the House Republican leader, said any gas tax increase should be balanced by a cut in some other revenue, especially in light of the state's rosy fiscal picture.

"To increase taxes people are paying when you're having an economic boom is problematical," said Kittleman, of Howard County.

New projections show that the state will take in about $250 million more in transportation revenues over the next five years than had been expected only six months ago.

And recent action by Congress will mean an annual increase of about $130 million in federal transportation funds.

Pub Date: 11/25/98

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