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Transportation
proposal goes beyond deficit
By Liam Farrell
Capital Newspaper Staff Writer
Published November 01, 2007
As the
General Assembly grapples with tax proposals from Gov. Martin
O'Malley, politicians are facing a crucial question: How much
can they ask Marylanders to pay? "I have trouble with all tax
increases," said Del. Ted Sophocleus, D-Linthicum, a member
of the House Appropriations Committee. "If I just listened to
everyone who wanted something, our tax rate would be out of
sight."
The special
session that started Monday is not just about closing the state's
projected $1.5 billion fiscal hole - Mr. O'Malley also wants
to increase money for other government initiatives, such as
a transportation bill discussed by legislators yesterday that
would eventually boost funding by more than $450 million a year.
"We will have increased obligations in the future just to keep
the system operating in a safe manner," said John Porcari, secretary
of the Department of Transportation, during a joint meeting
of House and Senate fiscal committees. "We would not be here
… if all of us did not believe (the extra funding) is absolutely
critical."
By fiscal
year 2012, the governor's plan to increase the car titling tax
from 5 to 6 percent, index the gasoline tax to the cost of construction
materials, and adjust funding formulas and end transfers from
the Transportation Trust Fund would raise more than $380 million,
according to the Department of Legislative Services. The gas
tax would increase from 23.5 cents per gallon to 24 cents on
Jan. 1. Mr. O'Malley also plans to dedicate $57.5 million, from
a 1 percent increase in the corporate income tax, and $13.7
million, from closing a corporate tax loophole to transportation
projects. Those two actions would bring the total infusion to
$452.4 million by fiscal 2012.
Aside from
whatever Anne Arundel County projects would be taken up by the
state because of the new cash, Mr. O'Malley's proposal would
result in an extra $3.6 million of highway-user revenue for
the county in fiscal 2009. Some who testified at the hearing
said the plan doesn't go far enough. For example, Kathleen Snyder,
president and chief executive officer of the Maryland Chamber
of Commerce, said transportation funding should be increased
by $600 million a year to have a more beneficial impact. "We
have to find ways of moving people, our products and employees,"
she said. But the politicians who will vote on the bills in
committee, before sending them to the General Assembly at large,
have bigger concerns. Tackling both the deficit and increased
transportation funding is difficult because there are legitimate
reasons to do both, Mr. Sophocleus said. But he questioned whether
the transportation bill has a place in a special session ostensibly
devoted to closing the deficit. "I understand they need funds
… but should we do it now?" he said. "I thought I was here to
evaluate a deficit."
Historically,
money originally set aside for transportation projects has been
siphoned away to balance the budget. For example, former governor
Robert L. Ehrlich, Jr., took a total of $315 million out of
the Transportation Trust Fund in 2003 and 2004 and transferred
it to the general fund. In addition, the cost of construction
materials has skyrocketed. From 2004 to 2007, the price of steel
has gone up 60 percent, cement 60 percent, asphalt 25 to 30
percent, and the aggregate has increased 29 percent. Most revenue
sources for transportation projects - including the gas tax
- are not tied to inflation, and increasing prices drive down
the state's buying power, Mr. Porcari told the committees. Consequently,
the state has an estimated $40 billion in transportation needs,
he said - and that's a "conservative" figure. "Today we have
no money for any additional projects," Mr. Porcari said. The
huge backlog of projects and the corresponding gridlock in Maryland
demonstrates a need to get more money now, said Sen. Ed DeGrange
Sr., D-Glen Burnie, a member of the Senate Budget and Taxation
Committee who also heads the Capital Budget Subcommittee. "The
general public is fully aware what our transportation problems
are," he said. "It's something we have to add. We can't delay."
The legislature
will try to mitigate the effects of the tax increases, Mr. DeGrange
said. For example, the General Assembly will consider an amendment
on the titling tax that would give people a credit for the value
of a car they trade in. But even though the deficit and transportation
needs are two separate issues, neither can be put off without
egregious consequences, he said. "It is just a shame we have
to do them both at the same time," Mr. DeGrange said. "The bills
have come due." Although the General Assembly may tweak the
governor's transportation proposals - such as striking the up-front
gas tax increase and just relying on indexing and other revenue
to reach $400 million - it's a necessary part of the session,
said House Speaker Michael E. Busch, D-Annapolis. "Neither the
citizens nor the elected officials want to do this twice," he
said. "It's like a death by a thousand cuts." Although increasing
taxes puts legislators in tough positions with constituents,
politicians are elected for their integrity and should be able
to justify their decisions, Mr. Busch said. "People make responsible
votes and can defend them in their communities," he said. "People
that make tough choices … can be re-elected."
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