Laurence Levitan, Commission on Maryland's Fiscal StructureThe task force charged with figuring out how to pay for Maryland's future needs began looking yesterday at possibly increasing the gasoline tax or other fees to pay for the state's transportation projects.
Without increased funding, transportation officials warned, the state will fall behind on repairing aging roads and bridges, and on expanding mass transit, boosting security at airports and the port, and replacing the Woodrow Wilson Bridge.
"In the past, every four or five years, there was an increase in the gas tax, but we've had 10 years without a gas tax increase," said Frederick W. Puddester, a former state budget secretary who is chairman of the task force. "I think we're at a crossroads in that process."
A 1-cent increase in Maryland's gasoline tax would generate about $28 million per year, with about 30 percent of that set aside for local governments' road projects.
Maryland's gasoline tax, 23.5 cents per gallon, is lower than those in Pennsylvania and West Virginia but higher than those in Virginia and Washington, said legislative analyst Christine M. Anderson
"The gas tax alone can't solve the problem," said task force member Laurence Levitan, a lobbyist and former chairman of the Senate Budget and Taxation Committee. "It's a significant funding issue."
Another option discussed by the group - the Commission on Maryland's Fiscal Structure - is an increase of 1 percentage point in Maryland's 5 percent tax on the sale of motor vehicles. That would produce about $130 million, with the same 30 percent going to local governments. Maryland's auto sales tax, also called the title tax, is lower than those in Pennsylvania and Washington but higher than those in Delaware and Virginia.
The 17-member commission, created by the General Assembly this year, is to review the state's tax structure and other revenue sources with an eye toward identifying enough money to cover transportation, education and health care demands.
The panel includes many of the legislature's budget leaders as well as fiscal experts from outside state government.
Yesterday's was the first of a series of meetings examining the state's needs, and members of the commission said they were concerned about the picture presented by state Transportation Secretary John D. Porcari.
State analysts predict that over the next 20 years, the number of vehicle miles traveled on Maryland roads will increase from 48 billion miles a year to 68 billion miles a year. They also project a doubling of passengers using mass transit systems and Baltimore-Washington International Airport.
"Those are some sobering numbers when you look at the transportation needs now without even looking at the future," Porcari said.
In 1999, a separate state task force estimated that Maryland had $27 billion in transportation needs. The state's most recent construction plan calls for Maryland to spend about $8.5 billion on transportation projects over the next six years, 89 percent of the amount recommended by that commission.
The commission's recommendations don't include the significantly increased security demands after the terrorist attacks last year, including at least $200 million in added construction costs at BWI, Porcari said.
The state's $234 million share of the Wilson Bridge replacement project could increase because of higher-than-expected costs, and the federal government appears set to lower the percentage that it will contribute to road and mass transit projects, Porcari said.
To help cover some of the bridge's costs, transportation officials are counting on money being transferred from Maryland's general tax revenues, something that might be hindered by the state's budget woes. "If those transfers do not take place, that will affect future transportation projects," Porcari said.
The state has yet to figure out how it might pay for two other large projects under consideration, a new Metro "purple line" linking Montgomery and Prince George's counties and the Intercounty Connector highway between Interstates 95 and 270.
The commission did not make any decisions yesterday. Its schedule calls for it to make recommendations for handling next year's fiscal woes by Dec. 15, then spend spring and summer looking at long-term solutions.
The other demands facing the commission including figuring out how to pay for the Thornton Commission plan, adopted by the Assembly this year, to significantly boost spending on public education over the next five years.