Getting there

A regional challenge

June 24, 2007

When the chairman of the Greater Baltimore Committee mulled the challenges facing the region's economy, from urban blight to public education, he chose one above all the rest. The focus of the business community, announced Atwood "Woody" Collins III, who is M&T Bank's Mid-Atlantic president as well as GBC chairman, should be on transportation.

Right on. Transportation - especially access to public transit - is often the critical factor for businesses looking to relocate or expand. Small wonder. Baltimore-Washington is one of the most congested commuting corridors in the nation, and the anticipated influx of more than 40,000 military-related jobs is only going to make matters worse.

Avoiding regional gridlock will require greater investment in transportation infrastructure - at least $400 million in additional funding each year for rails, buses and roads, by Mr. Collins' estimate. So that puts Maryland's most influential business group firmly on the side of raising taxes.

That's not exactly a crowd pleaser, particularly considering that the state budget's projected $1.5 billion deficit is already likely to spur new taxes on businesses and individuals. And raising money for new transportation projects would have little, if any, effect on that shortfall.

But that hasn't deterred Mr. Collins, who suggests that every revenue source ought to be considered. The options include:

Raise Maryland's 23.5 cents-per-gallon gas tax and index the new rate to inflation. High fuel prices may make this an unattractive choice to many, but it's still one of the fairest ways to finance transportation - the more you drive, the more you pay. Each additional penny raises $33 million annually.

Raise the state corporate tax from 7 percent to 8 percent. Neighboring states have higher corporate tax rates, and the extra 1 percent would produce $61 million for the transportation trust fund.

Set aside a portion of a potential one-cent sales tax increase - perhaps one-fourth of that penny - for transportation. That would generate about $199 million each year.

Raise the car titling tax from 5 percent to 6 percent (to reflect the one-cent sales tax increase) to collect about $80 million yearly.

There are other, less conventional sources of potential revenue - a guzzler tax on fuel-inefficient cars, or congestion pricing at toll facilities. This much is certain: Whatever is ultimately chosen, taxpayers will need to see value for their money. If paying an extra nickel per gallon translates into spending less time burning gas in traffic, the trade-off is more than reasonable. That's a calculation that works not just for the business community but also for every Maryland resident.

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