Increase in Md. gas tax likely Top lawmakers say transportation system needs more revenue

Maryland will likely have to boost its tax on gasoline soon to keep the state's transportation system in good shape, the General Assembly's presiding officers said yesterday.

But bowing to political concerns, the lawmakers said any increase in the state's 23.5-cents-per-gallon tax on gasoline will have to wait until the legislature convenes after the 1998 elections.


"The money for these projects doesn't come out of the sky," Senate President Thomas V. Mike Miller said during an Ocean City forum sponsored by the Maryland Chamber of Commerce.

"It's going to take a tax increase. It's a bad word, but it's got to happen," said the Prince George's Democrat.


House Speaker Casper R. Taylor Jr. seconded Miller's remarks.

"To improve this kind of transportation system, we have to find real money," said Taylor, a Democrat from Cumberland. "You get what you pay for."

Maryland last raised its tax on motor fuels in May 1992, from 18.5 cents per gallon to 23.5 cents.

As of last year, Maryland's rate was the 10th highest in the nation. Connecticut had the highest, 37 cents per gallon.

Neither legislator discussed how big an increase might be necessary.

A projection prepared this year for the General Assembly showed that without a tax increase or other revenue boost, the funds available for transportation construction projects would decrease by about 12 percent a year through 2002 because of rising debt service and operating costs.

Taylor said that the General Assembly should create a task force next year to explore ways to raise more money for state transportation projects.

The Assembly could then take up the panel's recommendations during its 1999 legislative session, Taylor said.


Along with a possible gasoline tax increase, he said, lawmakers should consider creating a regional tax to pay for the mass transit systems in the Baltimore and Washington areas.

Worried about a backlog of construction projects, legislators have discussed raising the gas tax for at least the past three years, but Gov. Parris N. Glendening has maintained that an increase is not necessary.

Yesterday, a spokesman said Glendening has not ruled out a tax boost in coming years. For example, the state's transportation program could be hurt by federal budget cuts, said Deputy Press Secretary Ray Feldmann.

"The governor is saying we'll continue to watch the transportation trust fund very carefully and do what it takes to maintain Maryland's excellent transportation system," Feldmann said.

"Whether that includes an increase in the state's gasoline tax, it's far too early to make that assessment."

The tax on motor fuels is the largest revenue source for state transportation projects, including highway construction, mass transit and construction at Baltimore-Washington International Airport.


During and soon after the 1994 election, Glendening left open the possibility of an increase in the gas tax.

But the idea lost momentum when an upturn in the economy boosted transportation revenues significantly.

This year, the fuel tax is expected to bring in some $620 million. A 1-cent increase in the tax would generate roughly $25 million in additional revenue.

While the Maryland Chamber of Commerce has resolutely pushed for cuts in other state taxes, the group's president, Champe C. McCulloch, agreed yesterday that an increase in transportation revenues is necessary.

"Now is the time to plan for the increase we all know is needed -- in the transportation trust fund in 1999," McCulloch said.

"There simply needs to be higher levels of funding."


Even as he was saying the state must find more revenue for transportation projects, McCulloch urged lawmakers not to bow to election-year temptation and spend the state's unexpected budget surplus, which may be as high as $160 million by some estimates.

Instead, he said, the state should save the surplus to make sure the budget can absorb the 10 percent cut in the Maryland income tax that was approved by the legislature this year and is being phased in over five years.

"The prudent, fiscally responsible thing to do with the surplus is to bank it," McCulloch said.

Glendening and legislative leaders, however, have said the state should take advantage of the surplus to meet some spending needs.

Outlining the chamber's agenda for the 1998 legislative session, McCulloch also said the Assembly should defer consideration of a major boost in pensions for state employees until after the election.

"An election year is not the best year to try to arrive at a prudent fiscal solution," he said.


Pub Date: 10/15/97