Maryland special session includes proposal to boost transportation revenue

| 11/6/2007

Week two of a special session in the Maryland General Assembly is expected to include discussion about funding road and bridge work in the state. The state spends roughly $2 billion each year on transportation.
Gov. Martin O’Malley is pushing several transportation-connected tax increases to raise $400 million annually to upgrade the state’s infrastructure.

Advocates for tax increases say something needs to be done to keep up with skyrocketing costs for construction materials. Costs for road work have climbed while fuel tax rates have remained the same, they say.

To make matters worse, the state’s population continues to grow.

The governor’s plan would include indexing the state’s fuel tax rates to the cost of construction materials. The tax now brings in about $800 million annually.

Indexing the state’s fuel taxes would raise the 24.25-cent rate for diesel and 23.5-cent gas rate by half a cent starting Jan. 1. Inflationary adjustments would continue to be made at the start of each year.

O’Malley also wants to increase the vehicle titling tax from 5 percent to 6 percent, adjust funding formulas and end the diversion of money from the transportation trust fund. In addition, he talked about sending a larger portion of the state’s corporate income-tax collections to transportation.

Maryland transportation officials say the state requires as much as $600 million in annual revenues to keep pace with the state’s needs during the next 20 years. The state now pays for its transportation work out of an account that is separate from the general fund. That fund faces a projected $1.5 billion budget deficit for next year, The Washington Post reported.

Opponents said it isn’t the right time to raise revenue for transportation. The governor would be better served to focus on the state’s huge budget deficit before pursuing new spending plans, they said.

To view other legislative activities of interest for Maryland in 2007, click here.

– By Keith Goble, state legislative editor