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No consensus on how to fund state’s transportation needs

ANNAPOLIS — Powerful state lawmakers have said publicly that finding a new revenue source to pay for transportation projects is among the most important issues in this year’s session of the General Assembly.

Traffic at the intersection of Eastern Avenue and President St. in Baltimore around 8:30 a.m. on Tuesday, October 7th, 2008. (Maximilian FranzThe Daily Record.)

Yet to this point — nearly halfway through the annual 90-day session — only one bill has been authored that could raise the $700 million to $800 million most say is needed to pay for Baltimore’s Red Line and suburban Washington’s Purple Line while still maintaining Maryland’s overcrowded roads.

Even that bill, Senate Bill 830, sponsored by Senate President Thomas V. Mike Miller Jr., isn’t considered a panacea — not even by its sponsor, who has said passage of a transportation funding model depends on Gov. Martin O’Malley.

“We’ve given him a menu. My bill was a menu,” Miller said Tuesday. “I’ve put it out there, and I hope somebody bites and says, ‘Let’s move forward.’”

It remains unclear whether the politically ambitious O’Malley has enough remaining political capital to champion a new transportation plan that would likely include a tax increase of some kind. But until O’Malley chooses a path, Miller’s ideas are the only ones being actively discussed in Annapolis. His bill will receive a hearing in the Budget and Taxation Committee Wednesday.

The Daily Record interviewed transportation funding advocates and skeptics to get their takes on each component of Miller’s legislation and other ideas that have been discussed.

 

Miller has proposed imposing a 3 percent gasoline tax on wholesalers, the cost of which would be passed on to consumers and collected by the state for road projects and maintenance. Complementing that statewide tax is a 5-cent bump (to 28.5 cents) of Maryland’s per-gallon tax on gasoline. Local jurisdictions could claim all or part of that money for themselves — whatever they don’t claim would go to the state.

Donald C. Fry, president and CEO of the Greater Baltimore Committee

“We need somewhere between $700-or-$800 million, ideally, at the state level to address the $40 [billion] to $50 billion in highway and transit projects that have not been funded. Those two together would raise you roughly $450 million … which is a significant amount of money, but less than what is needed.”

Gus Bauman, former chairman of the Maryland Blue Ribbon Commission on Transportation Funding and of counsel at Washington office of Beveridge & Diamond P.C.

“A gas tax is the fairest, most equitable way to get the biggest number of dollars that we desperately need, and the gas tax is really a user fee. If you don’t use a lot of gas, you’re not paying it. For people that are driving through the state of Maryland … they’re helping pay for the roads. It’s the best way.”

Michele L. Whelley, president and CEO of The Central Maryland Transportation Alliance

“The 3 percent gas tax increase … that’s enough to restore the money that’s been taken away from the local jurisdictions, for the most part. … It would not provide any funding for new capital projects.”

Kathleen T. Snyder, president and CEO of the Maryland Chamber of Commerce

“It’s a proposal that’s a little different and has some interesting pieces to it. We would prefer an increase in the state gasoline tax — that hasn’t been raised in 21 years. The gas tax really should be a user tax for roads, highways and bridges.”

Larry Hogan, chairman of Change Maryland

“Basically, it’s just a tax shifting scheme that places the onus on local governments. If the counties fail to enact the tax increase, the state keeps the money. This is nothing more than just another state power grab, which is the last thing we need in transportation policy. You have to look at the thing in its entirety. … The last thing in the world we need is a gas tax.”

 

Miller has proposed creating two regional transit authorities — one for the Washington suburbs and another for the greater Baltimore area. Those authorities could raise property taxes in the counties included in the region in order to pay for mass transit projects, such as the Red Line and Purple Line.

Fry

“I think that the concept of regional transit authorities is something that needs to be seriously examined and likely implemented. There needs to be some recognition that the regions that are more transit dependent should have some supplemental portion of the cost. I’m not sure that property tax is going to be the favored mechanism. Particularly in Baltimore city, you’re looking to reduce property taxes.”

Bauman

“It’s a great idea. It has to be thought through very carefully. … The reality is the idea of regional transit authorities makes a lot of sense and is used nationwide and around the world. The devil is in the details.”

Whelley

“The regional tax piece I think is problematic because … there’s been almost no prior legwork done in the local jurisdictions to try to sell that idea. How do they define that region, and what does it get?

Snyder

“We’ve been advocating for how you would put these regional taxing authorities together. Certainly, that has to be a piece of this whole effort. … Clearly, for most of the counties in Maryland, most of their residents are not going to ever use the mass transit system. So there is a considerable amount of angst among voters in 20 of the 24 jurisdictions.”

Hogan

“This creates a new layer of government, a new bureaucracy. It doesn’t make sense.”

 

Miller has also proposed leasing or selling the naming rights of state highways, such as the Intercounty Connector.

Fry

“You have to look at every possibility that’s out there. But the key is going to be, what can you negotiate, how much control is the state still going to be able to maintain with respect to fares on that highway or the maintenance of that highway? The devil is going to be the details.”

Bauman

“I understand the sentiment behind it, but the point is you will never raise the money that we need just through naming rights.”

Whelley

“The naming rights, that should move forward whether it’s highways. The [bus rapid transit line in Cleveland] is named the HealthLine, and there were naming rights that were sold to that and that’s happened in other places.”

Snyder

“I credit President Miller for thinking outside the box. It’s a novel idea, and certainly stadiums have naming rights and it seems like a lot of money. But it’s kind of a one-time thing. So, what happens with the maintenance of the road and any upgrade to technology? It’s a novel idea.”

Hogan

“This is one that I’m not as adamantly opposed to. I think it’s worth discussing and worth considering. I applaud the elected officials for at least coming up with some creative ideas. There are some arguments in favor of it. But, however, out-of-the-box ideas can be looked at once we get the basics right, which we haven’t done.”

 

O’Malley has previously suggested either applying the state’s 6 percent sales tax to gasoline purchases or raising the sales tax a percentage point and using that extra penny to fund transportation.

Fry

“One cent on the sales tax would garner you about $700 million. … But you just had a sales tax increase a number of years ago. The question is whether or not there’s going to be a stomach or political will for that kind of increase.”

Bauman

“That is not a user fee. You’re now taxing people possibly of low income who are possibly using buses and trains, using the roads but not buying gasoline that much. … Sales tax is a very regressive tax.”

Whelley

“The rhetoric around transportation funding over the last three years has been focused on those big-ticket projects — the Purple Line, Red Line, Corridor Cities Transitway in Montgomery County. Because of that, when people look at transportation funding, particularly when they’re outside the jurisdictions that are served by those projects, the knee-jerk reaction is: ‘Why should we raise taxes to fund those projects that aren’t going to benefit the Eastern Shore, Western Maryland, Southern Maryland?’”

Snyder

“For these big transportation projects, perhaps [we should] look at sales tax or property tax. But we do have parts of the state that are right next to Delaware, which does not have a sales tax. We have a number of members that would be negatively impacted by it. We would prefer an increase in the state gasoline tax.”

Hogan

“The sales tax is [a problem] for the exact same reasons. It’s absolutely ludicrous for them to be considering any tax increases. The ruling elite in Maryland is seemingly completely disconnected. … There’s no reason to raise the revenue. Basically, it’s a lack of a coherent transportation policy and strategy.”