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Tolls, taxes and fees

FinanceRepublican PartyExecutive BranchPetroleum IndustryAAA

Maryland appears to be getting through the first week of July with no signs of Armageddon. Motorists are commuting in numbers typical for this time of year. A lot of their kids are staying home from school, but this is likely due to something called "summer vacation." All in all, it's business as usual, albeit a bit rainy.

That reality is quite a contrast to the gloom and doom offered by the Republican leaders who gathered on Kent Island on Monday to protest what they termed a "downpour" of tax and fee increases under Gov. Martin O'Malley. They were particularly angry at two that went into effect on July 1 — a 3.5-cent increase in the gas tax and higher tolls charged motorists at the tunnels, bridges and roads managed by the Maryland Transportation Authority.

Oh, and they were also quite steamed at the state-mandated fees local governments have been gradually adopting to pay for lowering the amount of pollution flowing into the Chesapeake Bay from storm water. Republicans and other critics call this the "rain tax," although the tax is actually aimed at dealing with the pollution that runs off parking lots, driveways and other impervious surfaces when there is precipitation.

In all, they say Governor O'Malley has raised 70 taxes or fees since he took office, and they don't like any of them. House Minority Whip Kathy Szeliga called them "shameful and unconscionable tax, fee and toll increases."

Now, while we can't speak for every fee that's gone up since 2007 (or even that there were 70, which is a bit more than what the legislature's budget analysts have charted), some were probably prudent and some not so much. But we can address the ones that seem to have Republicans worked up the most, and on those, they couldn't not be more wrong.

Let's take the gas tax for starters. Has anyone actually noticed that tax at the pump this week? According to AAA Mid-Atlantic, the average price for a gallon of unleaded gasoline in the Baltimore is currently $3.44. Last week, it was $3.47. So much for misery at the pump. There are greater variations in gasoline prices from one station to the next on York Road than 3.5 cents. Meanwhile, the revenue will pay for badly needed road and transit projects.

The tolls? Yes, the second phase of a planned toll increase isn't pretty, but there was no mystery behind how it happened. The MdTA sets tolls to pay for outstanding bonds. They had to raise tolls or risk default. Is someone suggesting that Maryland taxpayers make the bond payments instead? That would be unprecedented and unwise. Or perhaps they should blame whoever authorized the Intercounty Connector, the last major project built with those bonds, but that would be none other than Robert L. Ehrlich Jr., the last Republican governor.

The rain tax criticism has strayed particularly far from reality. Ten jurisdictions were required to approve stormwater fees, and nine have done so with only one, Carroll County, declining (while Frederick passed a virtually meaningless 1-cent tax). Yet all will eventually be required under the federal Clean Water Act to reduce stormwater pollution.

So who has the last laugh? Baltimore and those counties that have tried to comply with rules that will ultimately be enforced by the EPA against all states in the watershed or those attempting to skirt them? Keep in mind that counties with little set aside in their stormwater funds will be stuck spending tax dollars that might otherwise go toward schools or police and fire protection.

That's what makes some of the criticism so laughable. Don't raise the gas tax, and Maryland businesses suffer as congestion worsens. Don't raise tolls, and we default on bonds. Don't pass stormwater fees, and polluters get off while average Maryland taxpayers have to finance new storm drains, plantings and the like to reduce pollution from run-off.

Raising taxes and fees is not a black and white issue, or at least it rarely is. Even Republican governors will tell you that. Among the tax and fee increases approved during the last six years are the tax on slot machines and casino table games, the closing of the loophole that allowed large companies to avoid taxes through captive Real Estate Investment Trusts and closing another that allowed companies to avoid paying the transfer tax.

Would Maryland have been better off not passing any of those? Let casinos keep all the profits from gambling? Keep those particularly egregious loopholes open so the rest of us can shoulder the tax burden instead? Of course not.

Republicans are correct about this much: Maryland ought to consider how its tax structure affects its business climate and competitiveness, but that doesn't mean every tax is bad. The mistake GOP leaders in Annapolis make over and over again is to reduce complex matters to simplistic catch-phrases. All that demonstrates is that they can ape the worst of their peers in Washington and attack, attack, attack.

No doubt Mr. O'Malley's interest in higher office exacerbates the Republicans' pique. Perhaps a few minutes on the evening news decrying the Democratic governor is all they really want. If so, what a shame. Maryland's status as a state dominated by one political party is as much about the failure of the opposition to mount a reasoned counter-argument that appeals to middle-of-the-road voters than it is about any Democratic successes.

Copyright © 2014, The Baltimore Sun
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