Maryland’s General Assembly has joined the roster of state legislatures taking action on transportation funding, approving a long-term dedicated revenue measure that includes the state’s first gas tax increase since 1992.
Inspired by—and perhaps to compete with—Virginia, which enacted its own financing package last month, Maryland’s plan will implement a 3-percent sales tax on wholesale gas over three years, and preserve the existing 23.5-cent-per-gallon gas tax. The original plan submitted by Gov. Martin O’Malley (D) called for reducing the gas tax by 5 cents, and adding a 4-percent sales tax on gas purchases over two years.
Should the U.S. Congress fail to enact legislation allowing states to collect Internet sales taxes, the wholesale gas tax would increase to 5 percent by July 2016.
Supporters say the bill will yield approximately $4.4 billion for new road and transit projects such as the Purple Line in the Washington, D.C., suburbs, and the Red Line light rail line in Baltimore. Without the new plan, Maryland would have been unable to fund anything besides maintenance work after 2017.
To ensure all of the funds go to their intended purposes, Maryland’s Senate passed a “lockbox” bill, preventing future governors and legislators from diverting the revenue to offset deficits in the state’s operating budget. That measure is now under consideration by the state House of Delegates.
Maryland’s General Assembly adjourns on April 8.
Speaking of Virginia, Gov. Bob McDonnell (R) has proposed some adjustments to his coveted legislative achievement that will be voted on by the Virginia General Assembly on April 3.
The amendments are designed to address concerns raised by Attorney General Ken Cuccinelli (R) regarding the legality of granting regional taxing authority specifically to Northern Virginia and Hampton Roads, rather than population density as called for in the state’s constitution.
Cuccinelli, the likely Republican nominee in this fall’s election to replace the term-limited McDonnell, had expressed his opposition to the bill while it was under consideration. He has signaled his approval of McDonnell’s “fix,” essentially giving taxing power to any planning district commission that meets population, vehicle count, and transit ridership thresholds.
Northern Virginia and Hampton Roads are currently the only regions that meet that criteria.
Only simple majorities in each house of the legislature are needed to OK McDonnell’s amendments, which also include changes to various new fees on hybrid vehicles, hotel fees, and property values in congested areas, and mirror’s Maryland’s proposed requirement to mandate use of the revenue solely for transportation.
Should the amendments be approved, the plan will total nearly $6 billion in transportation revenue over the next five years.UPDATE 4/4/13: The amendments were approved yesterday. The new tax structure becomes effective on July 1, 2013.