By Michael Dresser, The Baltimore Sun
10:10 PM EDT, March 13, 2012
Gov. Martin O'Malley is expected to make a personal, perhaps quixotic pitch Wednesday for what could be the least popular proposal in Annapolis this year: raising the tax on gasoline.
The governor is scheduled to testify before House and Senate committees on behalf of his $613 million-a-year plan to apply the state's 6 percent sales tax to gas so Maryland can start spending hundreds of millions of dollars on backlogged road and transit projects.
It won't be an easy sale, and O'Malley knows it. Gas prices have been rising in recent months, and some forecasters predict that they could exceed $4 a gallon within weeks. Many in the public don't see why more gas tax money is needed. It's an especially hard sell when the Democratic governor is also trying to raise income taxes.
"I don't think there's a revenue more unpopular than the gas tax," the governor said in an interview Tuesday night.
O'Malley said he's putting the prestige of his office on the line "because I don't want my kids when I'm done here, if bridges start collapsing around the state, to ask me why I didn't try and didn't do something."
Senate President Thomas V. Mike Miller — who before the session had all but promised that a gas tax increase would be approved — on Tuesday came close to ruling out an increase during the current 90-day session.
"As long as the gas price is high, I don't see any appetite for a gas tax increase," said Miller, a Calvert County Democrat. He suggested the climate for passage might be better if a special session were called later this year, especially if gas prices go back down to about $3 a gallon.
O'Malley said he's open to amendments and negotiations — even a delay in the effective date until a time when gas prices seem less onerous. But he wants the General Assembly to take action before it adjourns April 9.
"There are 30 days left in the session," he said. "I don't see a reason to punt on first down."
Proponents say there are compelling arguments in favor of raising the gas tax. Marylanders have been paying the same 23.5-cents-a-gallon tax since 1992, and the revenue it brings has lost two-thirds of its value. The last time the gas tax was raised, the price of gas was $1.08 a gallon.
And Maryland roads need work, tax supporters say. The state has some of the most congested roads in the nation — and the longest average daily commute in the United States.
There's not a county in Maryland that doesn't have expensive and long-delayed projects on its wish list.
Baltimore wants to build the Red Line. Baltimore County wants to expand Reisterstown Road near Stevenson University. Howard wants to widen a dangerous stretch of Route 32 where the traffic backs up morning and night at Clarksville. Anne Arundel wants to improve Route 175 to handle the growing workforce at Fort Meade.
None of those projects can move forward without money.
Though most legislators are aware of that, Sen. Edward J. Kasemeyer, a Democrat from Howard County and chairman of the Senate Budget and Taxation Committee, said the governor faces a "very tough" challenge getting the tax through his panel.
O'Malley said one of the points he will stress to legislators is the erosion in the buying power of the money brought in by a flat gas tax.
"No business would survive if the price of its product had to stay fixed at the level in 1992," he said.
The governor will also argue that projects the money would pay for would give a big boost to the state's economy by generating 19,000 construction jobs. Major business groups such as the Greater Baltimore Committee and the Maryland Chamber of Commerce are supporting a gas tax increase.
But his proposal — which could raise the tax on gas an estimated 18-21 cents over three years — comes at an especially difficult time. The state faces a $1 billion budget gap that the governor wants to close with a mixture of cuts and an income tax increase. There's also a proposal on the table for a higher "flush tax" to upgrade the state's sewer systems to protect the Chesapeake Bay.
Gas tax advocates have been hampered by Maryland's track record under O'Malley and previous governors of dipping into the Transportation Trust Fund during lean years to help balance the budget — in effect taking money meant for roads and transit to cover the routine costs of government.
Lack of public trust that gas tax money will be used for transportation projects is one of the main impediments to winning public support for it, a state tax force concluded.
Even the automobile group AAA Mid-Atlantic is now urging lawmakers to reject the gas tax increase unless the money is shielded by a constitutional amendment preventing such "raids." The governor said Tuesday night that he would not oppose such an amendment.
Supporters of increased road and transit pending appreciate that the governor is fighting for an increase. James A. Russ, president of the Maryland Transportation Builders and Materials Association, said he wished O'Malley had done so two years ago but is happy he's doing it now.
"It shows leadership, and we are in a dire situation," Russ said. He said companies in his industry are going out of business because they see little new work in the pipeline.
But Republican leaders scoff at O'Malley's claims that increased transportation spending would boost employment.
"Raising the gas tax is the ultimate jobs killer," said Senate Minority Leader E. J. Pipkin, an Upper Shore Republican.
The gas tax gets caught up in other ideological battles as well. Maryland is unusual in that it pools its transportation revenue — from the gas tax, registration fees, titling taxes and other sources — in a trust fund that supports two major urban transit systems as well as its network of state highways.
For many legislators from rural or outer suburban districts, mass transit is a boondoggle and should be funded by taxpayers in the jurisdictions that use it. There may be a backlog of road projects in their home counties, but as long as the gas tax funds buses and subways, there will always be a reason to oppose raising it.
This year, however, even legislators from pro-transit areas are wary of voting for a gas tax increase. Lawmakers know they have a mandate in the state Constitution to balance the state operating budget — but not to fund transportation projects.
Sen. Lisa A. Gladden, a Baltimore Democrat and a Red Line supporter, said she will vote for an income tax to avoid drastic budget cuts. But that's all she feels she can ask of her constituents.
"The gas tax and all that other stuff — it's too much," she said. "We can do it next year."
Copyright © 2013, The Baltimore Sun