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Maryland’s gas tax could rise 15 cents

ANNAPOLIS – Maryland’s gas tax would rise 15 cents per gallon under a plan being considered by a state commission tasked with boosting the state’s transportation revenue.

The proposal also would call for increases to vehicle registration fees, the titling tax on new and used cars, higher transit fares and a range of fee increases at the Motor Vehicle Administration. The cost of emission inspections would double to $28.

Gus Bauman, chairman of the Blue Ribbon Commission on Maryland Transportation Funding, said the package of revenue-raising options is “a balanced, reasonable, long-term approach that will allow the governor and General Assembly to react to something and start debating.”

The proposal would increase transportation revenue by $813 million per year when fully implemented, according to state budget analysts. The commission proposed that the gas tax hike be spread equally over three years and that the tax rate then be indexed to inflation.

Maryland’s gas tax — now 23.5 cents per gallon – has not been raised since 1992.

Commissioners will return to Annapolis on Oct. 25 to formally vote on their recommendations to the General Assembly. The funding options will dovetail will policy suggestions, including one that would protect the Transportation Trust Fund from future budget raids.

“I think there is a credibility issue with our constituents,” said Senate Majority Leader Robert J. Garagiola, D-Montgomery. “It may be easier for some legislators to vote for it if they can go back to their constituents and say there is some firewall put around it.”

This year’s budget borrows $100 million from the trust fund to prop up the state general fund and rainy day funds.

“What a horrible message to send at a time when we’re trying to reestablish trust and raise revenues through taxes and fees on the public,” said commission member Lon Anderson, the director of government relations for AAA Mid-Atlantic. “I think we lack credibility going to the public saying ‘We need this money for transportation.’” Transportation spending is expected to be a major topic of debate during the 2012 legislative session. Major projects like the Red Line and Purple Line light rail projects cannot be built without an infusion of new state transportation revenue, according to the Maryland Department of Transportation.

The $2.2 billion Red Line was granted an expedited federal review by the Obama administration on Monday that could shave up to two years off the project, moving up the expected completion to 2018.

Bauman cautioned the options discussed Tuesday are still tentative.

But commission members appear to have few options to reach their revenue goal of more than $800 million to refill the state’s transportation coffers and restore state transportation grants to counties and cities. Budget raids have cost local governments about $350 million in transportation grants per year over the last three years.

The commission’s proposal includes a provision that would gradually restore local funding over five years.

There were other tax increases on the table Tuesday, but those suffered from inattention or outright rejection by the commission.

Applying the 6 percent sales tax to gasoline would bring in $613 million a year, but was not part of any of the scenarios commissioners discussed.

Increasing the sales tax or property tax and dedicating the extra funds would have allowed the commission to avoid the gas tax hike, but those ideas were discarded early because of their weak ties to transportation.

The gas tax increase, which would raise the current tax to 38.5 cents per gallon, would bring in $498 million a year when it is fully implemented.

Increasing vehicle registration fees by 50 percent would yield $165 million and raising a host of MVA fees would bring in another $34 million. Increasing the costs of Maryland Transit Administration bus and train trips would add $25 million. The emissions inspection increase would add $22 million.

If all were enacted by the General Assembly, they would represent a 28 percent increase over the nearly $3 billion in Transportation Trust Fund revenue expected this year.

Some commission members suggested offering lawmakers a wider menu of options or focusing on policy recommendations instead of revenue-raising ideas.

Robert J. Etgen, executive director of the Eastern Shore Land Conservancy, said he was “discouraged” with the commission’s work.

“My sense is we won’t win on the ‘trust in the trust fund issue,’” he said. “And my sense is we won’t win on the gas tax issue, either.”