Sometimes, you just have to say, what the heck.
At least that seems to be the attitude behind one Maryland legislator’s proposals to generate some much-needed highway funding cash by increasing the state’s fuel tax.
Like other states confronting revenue shortfalls, Maryland is trying to close a projected $2-billion budget gap for the upcoming fiscal year. With many lawmakers dead-set against anything that even smells like a tax increase, particularly in an election year, the budget-balancing measures of choice have so far been cuts in state-funded services and employment.
Maryland’s governor and legislative leaders have also vowed to oppose any tax increase this year.
But the prevailing sentiment didn’t deter Del. Charles Barkley (D-Montgomery Co.) from introducing two bills that would raise the state’s taxes on gasoline and diesel fuel for the first time in nearly two decades.
Md. HB 479 calls for an annual two-cent per-gallon increase over the next five years, producing an estimated $63 million in FY 2011, and as much as $327 million in FY 2015 for state and local projects.
Alternatively, Md. HB 969 would impose a half-cent fuel tax addition in FY 2011, and tie future annual increases of up to one cent to ENR’s Construction Cost Index (CCI). This approach would generate $15 million in FY 2011, and $89 million by FY 2015.
Not surprisingly, legislators aren’t exactly jumping on the fuel tax increase bandwagon. Of his 140 House colleagues, Barkley’s two-cent bill has attracted a single co-sponsor. The bill with the CCI approach has fared somewhat better, garnering six co-sponsors.
Barkley himself holds little hope for the bills’ prospects, but perhaps he does deserve credit for offering the issue for debate, regardless of one’s position on the merits of tax increases. These are desperate times for state transportation programs, and no idea should be rejected solely because it’s assumed to be politically unpalatable.
(Similar kudos go to the Virginia Senate, which approved a proposal to index the state’s per-gallon tax on gasoline with federal fuel efficiency standards. The state’s House of Delegates deferred consideration to next year, essentially killing the bill.)
As if Maryland’s transportation finances weren’t under enough pressure, a state budget panel has recommended that the General Assembly extend a two-year-old reduction in the transportation program’s share of sales tax revenue through the end of FY 2013. If approved, the diversion would direct approximately $60 million of sales tax revenue to the state’s general fund and help narrow the existing budget gap.
Higher costs for at least some Maryland motorists may still be inevitable. The Maryland Transportation Authority, which operates the state’s tolled highways, tunnels and bridges is contemplating boosting tolls to offset rising debt and capital costs from the construction of the $2.6-billion Inter-County Connector and other projects.
No specific plan has been announced, but a recent analysis projected that under the current toll rates, paying the agency’s debt load could require up to 50% of its operating revenue by 2015.
MTA’s revenue shortfalls have already affected the planned addition of express toll lanes to I-95 north of Baltimore. Reducing the original 10-mile project to eight miles and deferring tie-ins to White Marsh Boulevard and the I-695 Baltimore Beltway will allow the agency to divert $500 million from the original $1.4-billion budget to maintenance needs.