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Published on January 26th, 2011 | by Len Lazarick

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Coalition backs tax hikes for roads, transit, along with a “lockbox” to protect the money

By Len Lazarick
Len@MarylandReporter.com

Senate Majority Leader Rob Garagiola plans on introducing a major tax package to pump $400 million to $600 million a year into the dwindling transportation trust fund, along with a constitutional amendment to put the fund into a “lockbox” so it can’t be raided for other purposes.

A new coalition of 32 business and consumer groups known as the Statewide Transportation Alliance to Restore the Trust (START) is backing the move.

“We need to restore the trust in the trust fund,” said Don Fry, president of the Greater Baltimore Committee. GBC has been pushing for a gas tax hike and other funding mechanisms for years, as have state and local chambers of commerce throughout Maryland.

But before they get those higher taxes, “there need to be these legal protections first,” Fry said.

Sen. Rob Garagiola and Don Fry

Sen. Rob Garagiola, left, and Greater Baltimore Committee President Don Fry

“Many people are hesitant to raise more money” without guaranteeing it won’t be used for other purposes, said Kathy Snyder, president of the Maryland Chamber of Commerce.

Lon Anderson, public affairs director of AAA Mid-Atlantic, said Maryland had already won the Olympics for worst traffic in the nation. But the governor continues to raid transportation funds and “dig his hand a little deeper in the state cookie jar,” Anderson said.

In the fiscal 2012 budget he proposed Friday, Gov. Martin O’Malley is making a one-time transfer of $100 million from the transportation trust fund with $60 million going into the general fund and $40 million to the rainy day fund. He has again cut the highway user revenues for the counties.

Garagiola is a Montgomery County Democrat who sponsored legislation to establish, and now serves on, the Blue Ribbon Commission for Transportation Funding. He said there is now barely enough money in the trust fund to cover basic maintenance of highways, bridges and mass transit. There is practically no money for new projects, he said, including new transit lines.

“This is a very difficult climate to be suggesting this” tax hike, Garagiola told reporters and START members at a news conference. But “we cannot wait another year.”

“I look on this as a short term stimulus – five, six, seven years – for a long-term investment,” Garagiola said. He would not say what kind of taxes would be part of the package, but it will likely include an increase in the 23.5 cents per gallon state tax that Maryland last raised 19 years ago.

According to the START figures, the recession caused a net $1.5 billion drop in the transportation trust fund over six years, once federal stimulus dollars are accounted for.

A constitutional amendment for a lockbox on the transportation fund would require three-fifths super-majorities in the Senate and House of Delegates, but actually might be easier to pass than the tax hike itself, Garagiola said. The amendment would also have to be approved by voters in the 2012 election.

Senate President Mike Miller has been pushing for a gas take hike for years to build new roads and transit projects. Friday, he said he was “chagrined” the governor was taking money out of the transportation fund again.

He said voters “have to be assured that the transportation trust fund is in a lockbox,” but he doubts such an amendment could pass in the same year that the legislature would have to approve another transfer out of the fund that the governor has requested.

County leaders support the idea as well. Before O’Malley’s budget roll-out Friday, Howard County Executive Ken Ulman, president of the Maryland Association of Counties said, “If there’s a trust fund, there ought to be trust in it.”

In a December interview, Ulman said that corporate CEOs, not just leaders of business groups, needed to lobby the legislature for higher taxes to support transportation.

On Friday, Anne Arundel County Executive John Leopold told his county delegation that he had supported the lockbox concept when he served in the House.  This would assure “that the monies were in fact used for transportation,” Leopold said.

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  • http://mdpolicy.org/ John J. Walters

    This would be the only way that I would support an increase in the gas tax. Hope it goes through.

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