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Even with tax hikes, transit funds lacking

ANNAPOLIS — A proposal to raise nearly $900 million a year more to spend on Maryland’s transportation needs would fall billions short of goals to pay for three major transit lines and support local projects and other initiatives, state budget analysts said Thursday.

That forecast came packaged with a wide range of gloomy fiscal projections for lawmakers on the Spending Affordability Committee.

Maryland faces structural deficits of about $1 billion through 2017 if revenue and spending continue on their current tracks, according to the Department of Legislative Services.

“We are not going to naturally grow our way out of the remaining budget gap,” said Warren Deschenaux, the legislature’s top budget analyst.

And the state’s debt service is expected to outpace property tax revenues that are used to pay it. General fund revenue needed to pay debt service would grow from $78 billion in fiscal 2013 to $433 million in fiscal 2017.

Deschenaux recommended the state raise property taxes to keep up with its debt service. In 2013, that would require a hike to 12.4 cents per $100 of assessed value from 11.2 cents.

Along with the deficit and state debt, transportation will be a major issue in the 2012 General Assembly session. The Blue Ribbon Commission on Maryland Transportation Funding has recommended a package of revenue hikes that includes a 15-cent gas tax bump.

“I think that’s going to be discussed pretty thoroughly,” said House Speaker Michael E. Busch, D-Anne Arundel. “You haven’t had a real injection of transportation revenues since 1992.”

The legislature raised the gas tax that year to 23.5 cents per gallon and has not touched it since.

The commission’s plan would bring in nearly $4.7 billion in new transportation revenue in the five years from fiscal 2013 through fiscal 2017.

Restoring transportation aid to local jurisdictions would eat up $2.8 billion of that total. Assuming a 50-50 state and federal split, Maryland would need another $1.2 billion for the Red Line, Purple Line and Corridor Cities Transitway.

“There’s no money for the construction of those transit lines,” said DLS Analyst Jon Martin.

Environmental efforts associated with the state’s transportation network would cost another $1 billion. Highway expansion, projects connected to growth at military bases in the state, upgrades to the Washington Metro system and system preservation total another $2 billion in needs.

Taken together, those efforts would leave the state $2.3 billion short even if lawmakers push through the commission’s recommendations in their entirety.

Legislative analysts also predicted slower growth in transportation revenues than Department of Transportation projections. Debt constraints that will limit bond sales, annual growth of 5.7 percent in the state’s vehicle titling tax — the department forecast 7.2 percent — and other factors could shave $1.1 billion from a $5.4 billion, six-year capital program, according to DLS projections.