Gas tax plan gets a mixed reception

Some question size of any increase, not the need

March 17, 2007|By Andrew A. Green | Andrew A. Green,Sun reporter

Business leaders joined Senate President Thomas V. Mike Miller yesterday in pushing for an increase in the gas tax to pay for new roads and mass transit, though support for his proposal to raise the levy by 12 cents-a- gallon was not universal.

Miller said he does not expect his plan, which would raise the current rate by 50 percent and tie future increases to inflation, to pass during the current General Assembly session. But he testified during a hearing before the Budget and Taxation Committee yesterday that the state needs $400 million to $600 million a year in additional funding to meet its needs.

"We have a transportation trust fund that is quickly running dry, and we need to come up with ways to find new dollars," Miller said. "This is not just an economic development issue. It's a quality of life issue."

Miller said he is confident that an increase in the 23.5-cent-a-gallon gas tax, which has not been raised in more than a decade, will be part of a revenue package that the state will adopt to fix its general fund budget gap, expected to be $1 billion or more per year starting next year.

He said he thinks a package will be adopted in a special session of the legislature, likely in September or October, but neither of the other two principal leaders in Annapolis, Gov. Martin O'Malley and House Speaker Michael E. Busch, has said he believes that a special session is necessary.

O'Malley has been open to the idea of a gas tax increase, but he has not endorsed Miller's plan. Busch has said he thinks a 12-cent increase is too much.

Some of the business leaders who testified in yesterday's hearing echoed that sentiment.

Maryland Chamber of Commerce President Kathleen T. Snyder said the chamber supports a gas tax increase - a rare endorsement for a group generally opposed to higher taxes - but only 5 cents a gallon. She said more money for the trust fund should come from other sources and as part of a comprehensive fix for the state's fiscal problems.

"We're going to have one chance to raise taxes or fees," Snyder said.

Representatives of other organizations, including the Maryland Highway Contractors Association and the Maryland Motor Truck Association, also pushed for more transportation funding, but not solely from a gas tax increase.

However, other groups, such as the Greater Baltimore Committee and the Greater Washington Board of Trade, endorsed Miller's plan.

But service station owners said they will fight the gas tax increase.

Gary Thompson, who owns an Exxon station in Annapolis, said the higher tax rate would take $7,000 a year out of his pocket because he is charged fees by credit card companies on the total value of each transaction - including the tax.

The gas tax also exposes an urban-rural divide. Sen. J. Lowell Stoltzfus, a Republican who represents the Lower Eastern Shore, said his constituents wind up paying a disproportionate share of the gas tax because they have to drive more miles than people do in urban areas. But they get no benefit from the mass transit that the gas tax supports, Stoltzfus said.

Transportation Secretary John D. Porcari, while not endorsing any particular plan for additional revenues, said the state has a $40 billion backlog of transportation projects. The population influx from a federal military base realignment plan, known as BRAC, could add billions to the state's needs, Porcari said.

"We have our own little version of a perfect storm here," he said. "Our expenses are growing above the rate of inflation, and our revenues are not sensitive to inflation. We have a growing backlog of needs ... and we have immediate problems we know we need to address with respect to BRAC."

andy.green@baltsun.com

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