Please ensure Javascript is enabled for purposes of website accessibility

Business leaders don’t see $800M for transportation

ANNAPOLIS – Maryland business leaders predicted Thursday that the General Assembly will not raise the $800 million for transportation projects that a commission called for last fall.

Prominent business representatives have been among the most ardent and outspoken supporters of a push to raise the state’s gas tax to allow for more spending on roads, bridges and transit.

Kathleen T. Snyder, president and CEO of the Maryland Chamber of Commerce, predicted lawmakers would agree on tax and fee increases to bring in an additional $500 million a year.

“I think that’s probably realistic for the legislature,” she said Thursday at a Maryland Economic Development Association conference. “We need twice that amount.”

The $800 million annual funding boost recommended by the Blue Ribbon Commission on Maryland Transportation would be driven principally by a 15-cent gas tax hike spread over three years.

Maryland’s gas tax has been 23.5 cents per gallon since 1992. Raising it 15 cents would bring in $491 million a year, according to the commission. Raising vehicle registration fees, the cost of Motor Vehicle Administration services, transit fares and the titling tax would bring in the balance of the $800 million.

Gov. Martin O’Malley, a Democrat, has signaled that he will seek to increase transportation spending, but he has not said how by much or how he would pay for it.

Senate and House of Delegates leaders have said a 15-cent gas tax increase is too much.

Jim Dinegar, president and CEO of the Greater Washington Board of Trade, forecast a 9-cent hike on Thursday.

“I don’t think they have the stomach for 10 [cents],” he said.

Greater Baltimore Committee President and CEO Donald C. Fry threw out the $500 million figure, too, but said that should be the floor.

“That’s the minimum that the state needs,” he said.

Restoring local transportation aid with funds above $500 million will be “a policy call for legislators” and part of negotiations between the state and local governments over how to split the costs of education and other services, Fry said.

Speaking later at the MEDA event, House Minority Leader Anthony J. O’Donnell, R-Calvert and St. Mary’s, said a gas tax hike is “likely.”

“I think the governor and the presiding officers want to this to happen, so I think it’s likely,” he said. “But I think it’s ill-advised.”

House Speaker Michael E. Busch, D-Anne Arundel, called again for political leaders in central Maryland to urge lawmakers to vote for a transportation revenue package if they hope to reap the benefits of local road and transit projects.

“If you believe they’re going to vote for it and not expect to get projects, you still believe in Santa Claus,” the speaker said. “That’s the way it works.”

Last year, the Baltimore mayor and Howard, Montgomery and Prince George’s county executives came to Annapolis to call for a 10-cent gas tax hike.

With major issues such as the gas tax, a 1-cent sales tax increase floated by O’Malley on Wednesday, offshore wind, business regulatory reforms and a $1.1 billion deficit crowding the docket amid still uncertain economic conditions, business leaders said the stakes are high for the 2012 session.

“I think Maryland is at the cusp of growing exponentially or falling way, way, way behind who we see as our top competition,” said Snyder, referring to Virginia.

Dinegar and Snyder said the state should speed approval of hydraulic fracturing, or fracking, to extract natural gas from shale deposits in Western Maryland and invest more in transportation while avoiding general tax increases and more burdensome business regulations.

“I think the stakes are very high and I don’t think it’s just in terms of Virginia,” said Dinegar. “There’s a perception growing that Maryland is unfriendly to business.”

Senate President Thomas V. Mike Miller Jr., D-Calvert and Prince George’s, spoke briefly at the MEDA event but sought to reassure business leaders on the prospects of a sales tax hike.

“It’s not happening, folks,” he said.