Md. gas tax, vehicle fees demise likely House committee expected to doom Schaefer initiative

ANNAPOLIS — ANNAPOLIS -- The Schaefer administration's effort to slap a 6 1/2 -cent-per-gallon tax on gasoline and to increase scores of motor vehicle fees is expected to get a quiet burial today, legislative leaders said.

The bill was scheduled to be voted on today in the House Ways and Means Committee. House Speaker R. Clayton Mitchell Jr., D-Kent, who has long opposed the gas tax, said: "I assume . . . it [the gas tax bill] probably will be put to rest on the House side."


Mr. Mitchell said the proposal, which was designed to pump $1.5 billion into the state's depleted Transportation Trust Fund over the next five years, might be resurrected by the Senate in some form and sent back to the House.

But Sen. Laurence Levitan, D-Montgomery, chairman of the Senate Budget and Taxation Committee, said he doubted that would happen.


"I always respect the judgment of the other house," he said. "If they [the House members] are not going to pass it, that's just a fact of life and we're going to have to [live with] it."

Once a supporter of the gas tax proposal, Mr. Levitan predicted last night that because Gov. William Donald Schaefer lacked "the political muscle most governors have, including Harry Hughes, he's not going to get it [the gas tax] through."

Defeat of the gas tax and fees would mark the third time this session that one of Governor Schaefer's major initiatives has been rejected by the General Assembly, following earlier defeats of the Linowes commission's tax-restructuring plan and the 2020 commission's statewide growth-management plan.

Delegate Tyras S. Athey, D-Anne Arundel, chairman of Ways and Means, and other House legislators confirmed that the bill's defeat was "likely."

House Majority Leader D. Bruce Poole, D-Washington, said legislators had hoped not to raise any taxes, but were forced to do so with capital gains and cigarettes.

That was as far as they wanted to go, he said.

Legislators said they were unhappy about what state Transportation Secretary O. James Lighthizer told them would happen with a compromise plan to raise about $40 million per year solely through higher motor vehicle fees.

Mr. Lighthizer said that all the money would be needed to repair and renovate the state's rail, road and bridge network. There would be nothing left over, he said, to launch new construction efforts.


House legislators wanted the money, and the borrowing it would enable, used for new construction projects.

The original bill would have enacted a 6 1/2 -cent increase this year, later replacing it with a 5 percent sales tax on the per-gallon price in Maryland. The tax would have been calculated on the price of a gallon of gas already including 32.6 cents in state and federal excise taxes.

It would also have increased more than 110 motor vehicle fees, including a 25 percent boost in annual vehicle-registration costs, from $27 to $34 for most cars.

Some of the money would have gone to make up a projected $583 million deficit in the state's transportation budget over the next five years. Because of that shortfall, the state currently has frozen contract awards on most planned new construction projects.

Word that the bill was probably doomed came despite a last-ditch effort by Mr. Lighthizer. He issued a press release yesterday disclosing that transportation revenues for February fell $7 million compared to the same month last year.

'If members of the legislature did not believe the seriousness of the fiscal situation for transportation before, they should now,' Mr. Lighthizer said. 'We made gloomy predictions for this month's revenues -- but these numbers are staggering.'


Revenue estimates, he said, show a 24 percent decline in February of the Titling and Motor Fuel Tax revenues and a 6.5 percent fall in receipts for Motor Fuel and Road Tax, which together comprise about 50 percent of the transportation budget.