Md. surplus prediction rises again

State officials expect $100 million beyond extra $279 million

Vehicle fees credited

Transportation tax backers defend need for rate increase

June 05, 1999|By Michael Dresser | Michael Dresser,SUN STAFF

Maryland's robust revenues have continued to swell in recent months, and state officials are projecting a budget surplus at least $100 million higher than the $249 million that had been expected.

The increased estimate for the state's general revenues comes on top of figures showing that the state's Transportation Trust Fund will take in at least $79 million more than previously forecast.

A high-ranking legislative analyst, Warren G. Deschenaux, confirmed the estimates yesterday.

While administration officials and legislative leaders hailed the numbers as good news, all but about $12 million of the previously expected $249 million had been allocated for such needs as school construction.

The new flood of revenue into the state transportation fund threatens to become an embarrassment of riches for supporters of a tax increase to pay for some of the expensive transportation projects on the state's drawing board.

Senate President Thomas V. Mike Miller said the additional revenue "will certainly weaken the consensus" that additional revenue is needed to bolster the transportation fund.

Miller said this year's surplus does not address the long-term needs of the transportation fund. He said the General Assembly will still have to consider raising the gasoline tax next year to cover the cost of such projects as replacing the Woodrow Wilson Bridge and building an east-west highway between Montgomery County and the Interstate 95 corridor.

"Somehow the transportation fund has to be enhanced," the Prince George's County Democrat said.

Del. Howard P. Rawlings, chairman of the House Appropriations Committee, dismissed the significance of the surplus. "It just means that's $79 million less of a problem, but when your problems are approaching $1 billion, that's just a drop in the bucket," said the Baltimore Democrat.

John D. Porcari, secretary of the Maryland Department of Transportation, said the increased revenues represent just 10 percent to 12 percent of the money the state needs to raise for its share of the Wilson Bridge project. "We have some truly staggering long-term transportation needs," Porcari said.

A leading Republican had a different take on the numbers.

"I hope these new figures make it obvious that we do not need to increase taxes -- again," said Del. Robert L. Flanagan, the House minority whip. "We need to begin to look for ways of funding our transportation programs with existing revenues."

Gov. Parris N. Glendening and top legislative leaders were preparing to propose a tax increase to fund transportation programs this year but postponed the effort because the governor was pushing for increased tobacco taxes.

Next year had been viewed as the best time politically to address transportation funding -- through a gas tax increase or other means -- because the next general election will still be more than two years off.

The new figures come as a commission of political and business leaders is about to launch a study of the long-term transportation strategies for the state. On the table before them will be a $3.5 billion backlog of highway projects, and a state mass transit plan to double ridership that could cost $330 million over the next 20 years.

The head of a transportation industry lobbying group said yesterday he had no fear that the surplus would lessen support for transportation spending.

"If the General Assembly wants to attack transportation problems on a long-term basis, which I'm sure Porcari wants to, this little blip isn't going to amount to much," said Robert E. Latham, executive director of Marylanders for Efficient and Safe Highways.

The projection of $79 million in additional transportation revenues is based on higher-than-expected payments of motor vehicle fuel taxes, title taxes and vehicle registration fees during the first three quarters of the fiscal year.

Deschenaux, director of the legislative Office of Policy Analysis, said the increased take from title taxes indicates that Marylanders are taking advantage of the robust economy to buy cars at higher prices. He said, though, that the jump in revenue from vehicle registration fees may have been exaggerated by an administrative change.

Deschenaux said general fund revenues through April show the surplus for the fiscal year ending June 30 will be significantly higher than expected. He could not give an exact amount but said it is safe to say the surplus would total at least $350 million.

Miller expressed the hope that some of the additional general fund revenue could be used to accelerate the income tax cut the General Assembly passed in 1997.

Flanagan said that while Republicans support income tax cuts, they might push to transfer the increased general revenue to transportation programs to forestall increases in other taxes.

Mike Morrill, the governor's communications director, said yesterday he could not confirm the new budget surplus projections, but Glendening's priorities for any additional general fund revenues would be construction of public schools and higher education facilities. State budget secretary Frederick W. Puddester could not be reached for comment.

Sun staff writer Marcia Myers contributed to this article.

Pub Date: 6/05/99

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