| Legislative Watch | 
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Maryland |
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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 needs 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.
8/22/07-Gov. Martin O’Malley said passage of a major transportation funding bill is one of his main objectives for next year’s regular session.
Citing concerns about the condition of Maryland bridges in the wake of the Minneapolis bridge collapse earlier this month, O’Malley said a major transportation-spending initiative is needed to upgrade the state’s infrastructure.
The state spends roughly $2 billion each year on transportation.
Discussion by the governor about a large plan for transportation funding doesn’t include any cost estimates or funding sources. He has previously floated the idea of increasing the state’s fuel tax or other levies to pay for road and bridge work, The Washington Post reported. He also talked about sending a larger portion of the state’s corporate income-tax collections to transportation.
Maryland transportation officials say the state needs 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 Post reported.
To help bridge the gap, lawmakers are talking about increasing certain taxes, including sales and income taxes.
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.
At a minimum, transportation officials in the state want to start increasing the fuel tax rates on a periodic basis to keep up with rising construction costs, The Post reported. The tax now brings in about $800 million annually.
Two bills offered during the regular session sought to increase the state tax collected at the pump on diesel and gas by 10 cents and 12 cents, respectively.
These and similar efforts can be brought up for consideration when the regular session convenes in January 2008.