Gas tax hike needed for economic development, supporters say
Truckers argue it will cost jobs, revenue
ANNAPOLIS Maryland lawmakers should increase the gas tax, raise the vehicle registration fee and safeguard transportation dollars from future raids, county elected officials, building industry representatives and other business leaders told a House of Delegates panel today.
Transportation funding needs are ballooning at a time when revenues have dried up and some of what remains has been diverted to close budget shortfalls. That has led a coalition of business interests to push for a gas tax hike and the creation of a lock box so the money could not be raided and used for other purposes.
"There is no trust in the trust fund at this point in time," said Maryland Chamber of Commerce President and CEO Kathleen T. Snyder, echoing a common rallying cry among advocates.
Supporters want to increase Maryland's 23.5-cent-per-gallon state motor fuel tax, which has remained unchanged since 1992, by 10 cents a gallon. Backers also want to boost the vehicle registration fee by 50 percent for all vehicles. Combined, that is projected to generate more than $375 million in new revenues in fiscal 2012.
Proponents argue that the higher tax is needed to improve deteriorating roads and pay for new highways and mass transit projects that will improve the state's business climate.
"Mobility is a central part of economic growth," said Donald C. Fry, president and CEO of the Greater Baltimore Committee and a member of the State Transportation Alliance to Restore the Trust, an alliance of business organizations advocating for more transportation funding. Without additional resources, "we're going to find ourselves stymied in gridlock and we're going to find companies unwilling to invest their resources in this state."
County officials, who have seen funds for road maintenance nearly vanish in recent years as the state has faced massive budget shortfalls also advocated for the bill's passage.
"Without new revenue, important economic development projects such as the Red Line and the Purple Line, shared priorities of the people before you today, will struggle to become reality," said Baltimore City Mayor Stephanie Rawlings-Blake (D), who testified on a panel with the executives of Montgomery, Prince George's and Howard counties.
Over the last three years, local governments have had more than $1 billion in local highway funds slashed, noted Howard County Executive Kenneth S. Ulman (D). His county, which used to receive about $6 million from the state for road maintenance and local projects, now gets less than $500,000.
"You can [absorb] them for a couple years, but once you get past a couple years, the road network and the bridge network really starts to deteriorate," he said.
However, representatives from the Maryland Motor Truck Association contended that increasing the gas tax will burden their members and lead them to purchase gas in lower-tax states.
"Don't let these businesses die," said Louis Campion, president and CEO of the association. "They are just pulling themselves now out of a recession. We know the state has funding needs. These businesses have funding needs too."
A 10-cent increase would amount to an additional $2,000 in annual fuel costs per truck and a 50 percent hike in registration fees would amount to $900 more per year, he said.
Coupled with significant toll increases and previous vehicle registration fee hikes, it would push many businesses "over the brink," Campion said.
Smart growth organizations declined to support or oppose the bill, but urged lawmakers to ensure that any additional revenue be used wisely on the most urgent needs.
"We really can't support a blank check for a long list of transportation projects," said Cheryl Cort, policy director of the Coalition for Smarter Growth.
Investing in the state's transportation network is necessary to create jobs and to protect the public welfare, said Audrey E. Scott, a former state planning secretary and former chair of the Maryland Republican Party who works for Cheney Enterprises, a major provider of concrete, sand, gravel and other building materials that is based in Waldorf.