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Gas tax increase rejected for 1999; Glendening's decision to delay issue reflects a reluctant Assembly; Tobacco proposal remains


Gov. Parris N. Glendening has decided not to seek an increase in Maryland's gas tax this year, in effect conceding that he does not have the votes in the General Assembly to raise the levy when the state has a substantial budget surplus.

But Glendening still feels that an increase in the 23.5-cent-a-gallon gas tax, or another tax, will be needed to help pay for billions of dollars in highway and mass transit improvements.

He is expected to seek some type of tax increase next year for transportation projects, and the difficult selling job starts now.

The governor and top legislative leaders issued a joint statement yesterday saying they will ask a task force to tour the state and talk to the public about the need for more transportation funding.

"The general public does not understand the tremendous unmet needs that we have," said House Speaker Casper R. Taylor Jr., who favors an increase in the sales tax earmarked for transportation. "The case has to be made."

Said Glendening: "We have some hugeneeds, both to deal with congestion as well as expanding mass transit. That costs money, and there's no way of backing away from that."

Glendening, who ran a campaign advertisement last year saying he opposed a gas tax increase, said this month he would push for such an increase this year or next.

He ultimately backed off in the face of political reality: He has already called for a rise in the cigarette tax of $1 per pack, and legislators are wary of raising taxes even once during these strong economic times, much less twice.

Agreement reached

"There seemed to be agreement that we had to do either the gas tax or the cigarette tax this year," Glendening said yesterday. "I want to get the tobacco tax through so that we can protect the health of our children."

Glendening would have been the nation's only governor pushing two major tax increases, according to a survey of the states by the National Conference of State Legislatures. Only a handful of states have one significant tax increase on the table this year.

The gas tax is the largest source of funding for the state's transportation trust fund, which spends roughly $2 billion a year, mostly for roads and mass transit. It is separate from the state's operating budget, which has a surplus of more than $200 million.

While supporters of an increase had not made specific proposals, they had talked about the possibility of a nickel-per-gallon jump that would raise $140 million a year.

There is a long waiting list of projects that could benefit from a tax increase: improvements and extra lanes for the Baltimore and Washington beltways, upgrading the Woodrow Wilson Bridge connecting Maryland and Virginia, building some form of an intercounty connector in Montgomery and Prince George's counties, and hundreds of millions of dollars in other road improvements throughout the state.

Highway contractors, while disappointed that the governor is waiting a year, are hopeful the delay could help legislators build a consensus for a significant tax boost next year.

'Long-term' commitment

"In some areas of government, you can get some money now and continue operating, and next year try to make things a little better," said Christopher B. Costello of Marylanders for Efficient and Safe Highways, a consortium of highway contractors, unions and other advocates for increased road spending.

"With things like major highway projects, you have to have a commitment to long-term funding, or you really can't have the project," he said.

But Senate President Thomas V. Mike Miller says it might still be difficult to pass a tax increase next year if the economy continues to do so well.

He was particularly pessimistic about Taylor's favorite option -- increasing Maryland's 5 percent sales tax to 6 percent. That would generate more than $500 million a year.

"As long as the economy continues to do well, I see absolutely no chance whatsoever for an increase in the sales tax," Miller said. Even in bad times, he said, a sales tax increase should be avoided because it would hit poor people hardest.

The governor, Taylor and Miller said they will wait to see the recommendations of the Transportation Investment Committee -- a task force of legislators, highway construction interests and others -- which will hold public hearings around the state this year and analyze the need for transportation funding.

Pub Date: 1/30/99

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