Maryland’s top legislative leaders agree the state needs to spend more on transportation projects but they’re not willing to go along with the proposed 15-cent gasoline tax hike over three years.
Michael E. Busch, speaker of the House of Delegates, agreed. “I think 15 cents is high,” said Busch, D-Anne Arundel.
Veteran lawmakers Miller and Busch, who have held their offices 25 and nine years respectively, sat down for exclusive, wide-ranging Maryland Newsmaker interviews with The Daily Record as the General Assembly prepared to convene Wednesday for its 90-day session.
The gas tax recommendation that sits atop lawmakers’ packed agenda this year came among a host of transportation tax and fee hikes proposed by the Blue Ribbon Commission on Maryland Transportation Funding in October. In all, the panel called for an increase of more than $800 million to spend on transportation every year.
|Watch Miller and Busch talk about the upcoming session|
“That’s optimistic, perhaps utopian,” said Miller. “It has to be at least $500 million to do the job.”
He added, “Not only are we going to improve transportation, but that gas tax is going to put people to work, to pave the highways and repair the bridges.”
Busch said the House “will take a look at all” the options on the table.
Gov. Martin O’Malley has said his budget will seek to raise revenue for transportation, but he has not revealed the specifics of his plan.
The commission recommended that the gas tax be indexed to inflation after the 15-cent increase as past of a package of revenue-raising options, including a 50 percent hike in vehicle registration fees, increasing the titling tax, raising transit fares, and raising Motor Vehicle Administration and emissions inspections fees.
Miller, however, said he would rather apply the state’s sales tax at the gas pump.
The commission examined the sales tax option but ultimately did not support it. Applying the 6 percent sales tax to gasoline sales would bring in $613 million per year, according to the commission.
Gasoline, which has long been exempt from the sales tax, has been taxed at 23.5 cents per gallon. The legislature last raised the gas tax in 1992.
Transportation advocates and many lawmakers have lamented letting the tax rate remain stagnant even as the price of gasoline has risen from just over $1 to, for a time, more than $4 a gallon.
“Having the sales tax applied to gasoline would mean that revenues would rise as the price of gas rises,” said Miller.
Busch declined to delve into specifics when asked how high the gas tax should rise. He said that would depend on the governor and how much support he has from Baltimore city and Montgomery, Prince George’s and Howard counties.
Political leaders from all four jurisdictions supported an ultimately unsuccessful attempt at a 10-cent gas tax hike last year.
“Whether those counties are going to step up to the plate and ask their delegations to support it, that’s what it’s going to take,” said Busch.
Priming the economic pump
Lawmakers also will debate a big capital budget this year that seeks to spend on other state construction projects such as schools. O’Malley has said he will seek to increase capital spending to speed hiring in construction, a sector hard-hit by the recession, but he has not revealed specifics. The fiscal 2012 capital budget is $1.48 billion.
“We’re betting on the come,” said Miller. “We’re betting the economy is going to improve, we’re betting that jobs are going to be created.”
Busch, too, has spoken positively of increasing infrastructure spending, but said he’ll wait “to see what the governor has in his budget.”
“I think the governor is going to have an aggressive capital budget,” Busch said. “There are things we’ve discussed and he understands the need for infrastructure.”
The plan would require the state to either raise revenue to support the thicker portfolio of projects or reduce planned borrowing in future years to offset higher short-term capital budgets.
The desire to spend more, however, is complicated by the state’s $1.1 billion budget deficit.
Busch said the governor’s budget will first tap a $314 million surplus from fiscal 2011 to lower the deficit. But he added that raising taxes and fees will be on the table this year to supplement the steady diet of spending cuts.
“You have to identify the cuts that people are willing to vote for as well,” Busch said. “In this profession, everybody wants to go to heaven but nobody wants to die.”
Miller, however, said he believes the state will not rely on new revenues to close the budget gap, in part because Maryland already has a reputation as being a “tax hell.”
“It’s not a question of heavy lifting. It’s a question of if it’s the right thing to do,” he said. “If you work in private enterprise or if you work for anyone outside of government, they think they’re too taxed already.”
Differences over gambling
While Busch and Miller agree on the need to invest more on the state’s highways, bridges and other infrastructure, they differ widely on gambling.
The Senate president said a bill that would legalize table games such as poker, blackjack and roulette would not pass his chamber without expanding gambling into Prince George’s County.
“Politics is obtaining money from persons outside your jurisdiction and holding your own personal disposable income in your jurisdiction,” said Miller. “That’s the reason Pennsylvania, West Virginia and Delaware are putting these [casino] sites on our borders.
“It’s imperative that there be a Prince George’s County site. Not just for Prince George’s County, which needs a teaching hospital and has a $125 million deficit this year, but for the state of Maryland to hold down taxes, to build schools and make this (gambling) a winner, finally.”
Miller floated Rosecroft Raceway and National Harbor as potential locations for a casino. He touted the National Harbor development on the Potomac as a way to draw gamblers from Washington, D.C. and Virginia.
“The customers are already there,” he said. “All we need to do is set up a cash register for the people of the state of Maryland to benefit.”
Maryland voters authorized five casino locations in 2008 — Baltimore city and Allegany, Anne Arundel, Cecil and Worcester counties.
“People were offered and opportunity there” in Prince George’s, Busch said. “They didn’t want it. I don’t know where the changes have occurred in Prince George’s County.”
Any changes to the landscape in Maryland, Busch said, would sap would-be gamblers from five casino locations.
Major changes to the gambling law, including table games and a sixth casino license, would have to be approved by voters in the fall.
“I don’t think there’s any intention right now to initiate anything here in the House,” Busch said. “We’ll wait to see where the governor stands on the issue and anything that might come from the other chamber.”
Miller said changes to the gambling landscape would come in a broad package that would address existing, slots-only casinos.
He said the state’s 67 percent tax rate on slot machine revenues should be lowered and casinos owners be given more freedom to add other types of entertainment to the mix.
“They need to be able to market these facilities,” said Miller. “They need to have shows there. They need to have Gladys Knight and the Pips. They need to hire union jobs. They need to provide first-class facilities, not butler barns with slot machines.
“They need something to attract the customers. That’s not possible with the current ratio of money between the state and the entrepreneurs.”
Same issues, new outcomes?
On other fronts, the General Assembly will revisit two major issues that played a large role in the 2011 session.
O’Malley has said he will modify a failed proposal to guarantee a market for offshore wind power and is now backing a drive to legalize same-sex marriage.
The Senate passed a same-sex marriage bill last year, but it sputtered in the House. Leaders there decided not to bring the issue up for a vote when it became clear the support was not there.
The House was “a few votes shy,” Busch said.
The legislation will likely be taken up first by the House, where passage is still uncertain.
Miller predicted same-sex marriage would pass his chamber by the same vote it did last year — 25-22.
Busch said delegates have been reviewing similar laws in other states and are fine-tuning ways to protect religious organizations, many of which oppose same-sex marriage.
“If two people want to go to Washington, D.C. and get married and they’re the same sex, they can come back and reside in Olney or Baltimore or Annapolis and they have the same rights as any other married couple,” said Busch. “I don’t think anything has fallen through the bottom of the earth that would make one believe that this is going to have a huge change on the way people live or change the quality of communities.”