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Gas-tax increase touted as tonic economy


ANNAPOLIS -- Don't think of it as a gas tax. Think of it as a "jobs" bill.

Truckers, gas station dealers, engineers, highway contractors, asphalt firms, sand and gravel companies, business groups and county executives lined up yesterday in support of Gov. William Donald Schaefer's proposal to raise Maryland's 18.5-cents-a-gallon gasoline tax to 23.5 cents a gallon.

In different ways, almost all of them said the same thing: raising the gas tax will jump-start the state's stalled highway construction industry, and that in turn will stimulate the state's recession-weary economy.

"This is a direct jobs-creation piece of legislation," said Donald P. Hutchinson, president of the Maryland Chamber of Commerce, which was joined in support of the gas tax increase by representatives of the Greater Baltimore Committee and the Washington Metropolitan Board of Trade.

"Business can broadly support this legislation and thinks it is critical to the future of the state," he said.

Anne Arundel County Executive Robert R. Neall gave the proposal his "unqualified support" and suggested that the legislature should have increased the gas tax rate last year. "I think a gas tax increase is overdue," he said.

Neil Potter, executive of traffic-clogged Montgomery County, called the proposal "a very high priority for us."

Even Baltimore County Executive Roger B. Hayden showed up in support of raising the gas tax, although he differed from virtually all the other witnesses by proposing that part of the proceeds be used to protect counties such as his from further cuts in state aid.

There was some opposition, but most of it was qualified.

Henry Bogdan, legislative lobbyist for the city of Baltimore, told the House panel that the city would support a gas tax increase, but only as part of a comprehensive budget and tax package that assures the financially troubled city it will get a substantial infusion of cash.

William F. Zorzi Sr., lobbyist for the Maryland chapter of the Automobile Association of America, said the motorists he represents can support the tax increase only if the money is devoted solely to highway and bridge construction and maintenance.

Although the Maryland Motor Truck Association backed the bill, and with it a proposed 3/4 -cent- See TAX, 3D, Col. 2TAX, from 1Dper-gallon increase in the tax on diesel fuel, independent truckers and bus company operators balked at having to pay higher fuel costs.

The 5-cent increase, which would go into effect June 1 unless legislators decide to move up the date to raise more money sooner, would raise an estimated $625 million over the next five ++ years. The additional revenue would permit the Department of Transportation to leverage another $241 million through the sale of revenue bonds, and to tap into another $1.2 billion in newly available federal transportation funds that require matching contributions from the state.

Support in the committee for the bill "is being driven by the federal bill that just passed," explained Del. Henry R. Hergenroeder Jr., D-Baltimore. "I think we have very little choice but to pass this tax."

Most of the testimony revolved around the loss of jobs that has occurred since the state's road construction program slowed to a crawl last year, and about the potential for employment once it gets going again.

"I want to make a personal appeal," said Pierce Flanagan, president of P. Flanagan & Sons, Baltimore highway contractors. During peak construction seasons, his firm employs about 500 workers, Mr. Flanagan said. "Six weeks from now, I'll have enough work for 150. What am I supposed to do with the others?"

Donald Dean, president of the Maryland Asphalt Association, said the 23 asphalt companies in the state have laid off about 40 percent of their workers since the middle of 1990, down from 6,000 to about 3,300.

Others in the highway construction business, or in related fields, had similar sad tales to tell.

Joel Lee, deputy secretary of economic and employment development, said his department estimates that the boom in the construction industry resulting from a gas tax increase would create 3,850 jobs a year, and the spinoff elsewhere in the economy would generate an additional 4,100 jobs plus $8.8 million in increased tax receipts to the state.

When the hearing was over, Ways and Means Chairman Tyras S. Athey, D-Anne Arundel, said many details still had to be decided, including whether to increase the tax by a flat per-gallon rate or whether to apply the state's 5 percent sales tax to the pump price. But when asked if the bill is likely to pass, Mr. Athey said: "I would have to say the chances are pretty good."

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