Marylanders who thought our debate over transportation taxes ended with last year's historic gas tax increase may be in for a surprise.
A new study released by the O'Malley-Brown administration suggests that state government's long arm may reach into the commuter's wallet yet again.
Quietly released in December, the report from the Local and Regional Transportation Funding Task Force floats the concept of regional transportation financing authorities, or RTAs, that would enable Maryland's local governments to impose new taxes to pay for road projects and transit operations. States from Michigan to Massachusetts have instituted RTAs in hopes of giving local government's new revenue to maintain roads, bridges and other infrastructure.
The O'Malley-Brown report considers a host of new taxes and fees Marylanders could be paying soon, including:
•A new vehicle registration fee, in addition to the state's current fee;
Lifting the cap on Maryland's local income tax;
Higher real estate transfer taxes, and;
New taxes and fees on property owners located near transportation upgrades, an idea dubbed "value capture techniques."
All told, the task force presented $298 million in new transportation taxes and fees for the Maryland General Assembly's consideration.
There are four reasons Maryland lawmakers should think twice before supporting this approach.
First, barely six months have passed since commuters were greeted by the largest transportation tax in state history. The law, which took effect July 2013, could drive the gas tax up 42 percent by 2016 and will cost commuters $800 million annually. Double-dipping in commuters' wallet so quickly would further erode the purchasing power of Maryland families and small businesses.
Second, the O'Malley-Brown administration isn't even investing in the transportation systems Marylanders use. Less than 10 percent of Marylanders use transit, yet the majority of last year's transportation finance package will be spent on costly transit projects. Before reaching in to commuters' wallets again, Maryland should instead designate some of these funds for local governments to spend on maintenance and repairs to the roads and bridges people actually use.
Third, local governments already have a transportation revenue stream, but the O'Malley-Brown administration won't provide it to then. The state has withheld $1.1 billion in transportation funding over the last decade that has historically been set aside for local governments, using it instead to plug holes in the state budget. Annapolis cannot credibly impose a new local transportation tax regime when lawmakers don't even provide local governments revenue that is rightfully theirs.
Lastly, Maryland is one of few states that allow local governments to impose their own income tax on top of the state's income tax, giving Maryland one of the nation's highest combined income tax levies. Lifting the cap on local income taxes, as this task force has floated, would further heighten Maryland's reputation as a high-tax state. With $5.5 billion in income migrating out of Maryland since 2000, as the nonpartisan Tax Foundation has reported, we can ill afford to drive more wealth across state lines.
The question is not whether Maryland citizens should pay for the transportation services they use. They should, and they already do. The question is whether lawmakers will finally impose fiscal discipline on their transportation spending instead of asking commuters to pay up yet again.
Christopher Summers is president of the Maryland Public Policy Institute, a nonpartisan public policy research and education organization that focuses on state policy issues. He can be reached at email@example.com.