Greater Greater Washington

O'Malley must step up on transportation funding

Last year, Governor O'Malley supported several controversial issues, including gay marriage and the Dream Act. Now it's time for him to adopt another courageous stand and support an increase of Maryland's gas tax or some other method of raising transportation revenues.


Photo by chesbay­program on Flickr.

According to reports, the O'Malley administration has yet to decide whether or not to push for an increase in transportation funding. Yet the administration clearly recognizes that without an increase in funding, both the Purple Line and Baltimore's Red Line will be dead in the water.

O'Malley told reporters on Tuesday:

There will come a time when it no longer makes any sense to put any money into the Red Line or Purple Line if the General Assembly wants to pretend we can fund our transportation challenges based on a 30-year-old flat tax on gasoline.

It's somewhat troubling that O'Malley hasn't yet decided whether or not it's worth fighting for these two major transit projects, both of which have been decades in the making. The state is on track (or perhaps, off-track) to run out of transportation money in 2017 for roads and transit.

O'Malley cannot increase transportation funding on his own. No, he'll need the legislature to also agree. But O'Malley has demonstrated his ability to get things done. In the 2011 session, gay marriage narrowly failed in the House of Delegates. But this year, with the charismatic support of the governor, the bill made it through both chambers.

If Governor O'Malley stands on the sidelines during the transportation funding debate, he might have doomed it, and the Red and Purple Lines, to defeat. But on the other hand, his support could be the crucial factor that makes a deal possible.

Gas tax has mostly declined since 1933

The real problem is that Maryland last raised its gas tax since 1992. Since that time, inflation has driven down the value of the 23.5¢ tax by 36%. In fact, the gas tax has been decreasing ever since it's high point in 1933, except for periodic raises in the tax rate. In 1933, the value of the tax was 3 times what it is today.

What could Maryland do?

It's not entirely clear what proposal the legislature will put forward this year.

Last year, the proposal was to do away with the exemption on gas sales from the state's 6% sales tax. The current 23.5¢ tax on gasoline is an excise taxit's 23.5¢ on each gallon. The 6% sales tax is a 6¢ tax on each dollar spent.

The current average price of a gallon of gas in Maryland is $3.26. If gas were subject to Maryland's sales tax, the cost would increase by 20¢. This would basically double the tax on gasoline. As a result, last year, the proposal called for phasing in the sales tax on gasoline by 2¢ every year for 3 years.

This would bring in a good deal of money for transportation. Another positive impact of this would be to index the gas tax to inflation, meaning that it will lose less value over time.

Another approach that the state is considering is raising the state's sales tax to 7% and earmarking the increase for transportation. It's not immediately clear how much revenue this will bring in.

Maryland must act

Doing nothing is not an option. If Maryland does not raise revenues to pay for transportation, the state will be unable to build important infrastructure. For years, O'Malley's plan to improve MARC has sat on the back burner. Now, the state's inaction on transportation funding is threatening two more of the governor's priorities: light rail lines in Baltimore and the Washington suburbs.

Both of these rail lines have the ability to be transformative in their communities. Local officials and citizens have been working since the 1970s to plan for the Purple Line. It would be such a waste for O'Malley's inaction to condemn this project to the dustbin of history.

And that's why Montgomery County officials are considering asking the state to give it the authority to levy its own gas tax. The county is concerned that the state legislature will continue to punt on the issue, and they're not willing to take the risk that one of the most important transportation projects in the region will die on the vine.

This is the time for O'Malley to step up and push the legislature to do the right thing on funding. It will move Maryland forward. And perhaps more persuasive to the governor, it will further bolster his reputation as a doer. Something clearly important for O'Malley's presidential ambitions.

Matt Johnson has lived in the Washington area since 2007. He has a Master's in Planning from the University of Maryland and a BS in Public Policy from Georgia Tech. He lives in Greenbelt. Hes a member of the American Institute of Certified Planners. He is a contract employee of the Montgomery County Planning Department. His views are his own and do not represent the opinion of his employer. 

Comments

Add a comment »

Could we sell back the ICC? If not, perhaps we could just tear it out completely, and use the concrete rubble to build an enormous pyramid that could be a revenue-generating tourist attraction? Or, recycling and older idea, maybe just pave the median on one of the straight stretches and use it as a jet runway for a new airport that would generate lots of fees for the state?

by Greenbelt on Dec 19, 2012 10:27 am • linkreport

Why does Maryland need another airport?

by ceefer66 on Dec 19, 2012 10:59 am • linkreport

Seems like a bit of cooperation between MD, DC, and VA is in order. I feel like if all three localities are able to raise gas taxes simultaneously, it will be less noticed, and will eliminate any need for people to cross borders for cheaper gas.

The people in Richmond beholden to Grover Norquist will likely not allow it to happen though, and VA will continue to drain its trust fund. MD and DC are somewhat hostage to what VA does. If DC and MD both taxed gas appropriately, gas would be .50c cheaper in VA, and the resulting people crossing into VA to get gas would simply increase congestion, and lose tons of sales for MD and DC, negating a portion of the increased revenue anyways.

by Kyle-W on Dec 19, 2012 11:00 am • linkreport

"O'Malley hasn't yet decided whether or not it's worth fighting for these two major transit projects..."

It's a very delicate business; he has to analyze how every aspect of these issues will help him to become President. If you can supply him reasons to support which will help him in 2016, he's all yours.

by Anon20748 on Dec 19, 2012 11:00 am • linkreport

@ Greenbelt

I've actually had a similar thought, sell the ICC. Although, it would not bring the infusion of cash you would hope for, because the state relativity spent little transportation trust fund money on that project. Most of that project came from bonds sold to the Maryland Transportation Authority, a semi-autonomous transportation agency responsible for the construction, maintenance and toll collection of all the State toll facilities. Selling the ICC would likely just help reduce future toll increases at the bridges/tunnels, and may provide MdTA the ability to plan a possible extension of the VA hot lanes across the Legion bridge. More money for transit will have to come from a new funding source, or, do what VA is doing, and further increase tolls on toll roads and earmark that money toward transit (which I don't see happening considering tolls are rising without that).

by Gull on Dec 19, 2012 11:01 am • linkreport

Trying to raise the gas tax isn't revolutionary, it's more of the same.

Instead, let's (1) eliminate the gas tax, (2) subject gasoline to the sales tax, and (3) declare transportation to be the general fund expenditure that it already is. That will open us up to a lot more freedom in choosing how to efficiently use transportation dollars.

by Paul on Dec 19, 2012 11:03 am • linkreport

If you merely taxed gasoline at the existing sales tax rate, you would lose money - at $3.30 a gallon, as the article states- thats only 20 cents a gallon - less than the 23 cent tax we currently have.

by Tom A on Dec 19, 2012 11:13 am • linkreport

@Paul, the problem with tying the tax to price of gasoline is that the price fluctuates by a factor of 2 over a pretty short time, whereas the consumption is much steadier. Moreover, the need for funding is inversely proportional to the cost of gasoline -- price drops, people drive a bit more, increasing maintenance needs when the revenues are decreasing; and vice versa when the price increases. Also, given that the time required to plan any new construction is like 10 years, it becomes intolerable if the funding for this is there, is gone, and is back again while a project is developed.

More than anything, what road maintenance and construction needs is steady, reliable funding.

by goldfish on Dec 19, 2012 11:25 am • linkreport

Wasn't failure to pass the gas tax one of the reasons cited for the departure of Beverly Swaim-Staley?
I think O'Malley WILL make a push on both light rail lines as soon as (or if I guess) he names a new Transportation Secretary.

by thump on Dec 19, 2012 11:37 am • linkreport

Halleluja!
This is what it comes down to. After the avalanche of smart talk growth, when and how will we build this smart transportation infrastructure. If O'Malley really want's a bite at the presidential apple, he needs to be out front of this revolution. It's great he's a charming musician type, but we've already had one of those presidents, he needs this kind of leadership on his resume to break into the big leagues.

Please raise my gas tax.

by Thayer-D on Dec 19, 2012 11:46 am • linkreport

This article is somewhat misleading.

The gas tax increase was actually a big priority for O'Malley during the last legislative session, do he's already on board. Also, even though O'Malley hasn't said whether the gas tax is on the agenda for the next session or not, he hasn't unveiled his agenda on anything.

If you're familiar with the governor and Maryland politics, it's pretty obvious that O'Malley will make the gas tax (or some other method of transportation funding) a number #1 priority next year. I've been very pleased with the many progressive bills the governor has drafted during his tenure (except the millionaire's tax), it's the morons in the state house that don't have a clue. Hopefully, with the nearly unanimous support in MoCo, HoCo, PGC, and B'more for the gas tax it passes next spring.

by King Terrapin on Dec 19, 2012 12:01 pm • linkreport

Memo to MD, VA, Congress & White House, Just raise the damn gas excise tax and then index it to inflation. Get a spine. Ok, if the Republicans want to get fussy, index it to the chained CPI. Gas prices are down, good time to get an excise tax increase through the legislatures.

The Baltimore Red Line submitted their Final EIS to the FTA last Friday. They could get a Record of Decision by March 1 and then start construction by 2015. Past time to get the funding in place for the Baltimore Red Line and the Purple Line.

by AlanF on Dec 19, 2012 12:23 pm • linkreport

goldfish, thanks for the response. I agree that the price of gas fluctuates greatly. Lots of prices fluctuate over time, but the government hasn't switched to per-unit taxing on everything. It requires hedging of bets and averaging over time to take out the spikes, but applying a sales tax to gas could certainly be done.

A real benefit to removing the gas tax is that we can then do away with the idea that drivers have "paid for" the road or that gas tax revenue should only be spent on road building and maintenance. If we want to see all modes as part of an integrated system, then we need to start paying for them out of a single pot.

by Paul on Dec 19, 2012 12:31 pm • linkreport

Options other than a gas tax and sales tax should be considered because those two taxes are difficult to sell politically. Reason being that the red and purple line disproportionately benefit DC burbs and B'more but the taxes are paid be all MDers. Another option that should be on the table as a replacement or supplement to the gas/sales tax is the creation of special tax districts near purple/red line stations. It's politically easier to sell a tax where folks who will get the most benefit from the transit lines pay a little more for them.

by Falls Church on Dec 19, 2012 12:39 pm • linkreport

@ Kyle-W: MD and DC are somewhat hostage to what VA does.

I disagree. VA does not have that many connections to MD and gas in DC is more expensive than in VA anyway.

by Jasper on Dec 19, 2012 2:12 pm • linkreport

@Falls Church

I'm pretty sure the sales tax increase is off the table. There's no way that the governor/GA would hike the sales tax (which is even more regressive than the gas tax) after raising it only a few years ago.

Also, the money raised by the gas tax wouldn't only be for the two light rail lines and the CCT BRT line, but would replenish the transportation trust fund to provide funding or bridge and highway infrastructure upgrades/repairs.

by King Terrapin on Dec 19, 2012 3:14 pm • linkreport

In places that tax gas a LOT more there is far less fluctuation in price.

by SJE on Dec 19, 2012 3:25 pm • linkreport

@Jasper

Meh, I find gas in Petworth to be similarly priced to Arlington, but your point makes sense.

by Kyle-W on Dec 19, 2012 3:30 pm • linkreport

Did you use O'Malley and courageous in the same posting? This is the man who's finger is nearly broken from holding it up to the wind so many times. Who is against slots as a silver bullet to ail state budget woes... then for slots...then for casinos. Who is for limited civil unions..then mum...then for gay marriage. Who is for the purple, the red, and everything in between if he thinks you want to hear it, but has hardly lifted a finger to make it happen. He will ONLY follow suit on transportation policies IF it boosts his national credentials for running for Prez.

by T1 on Dec 19, 2012 4:02 pm • linkreport

@ Kyle-W:Meh, I find gas in Petworth to be similarly priced to Arlington, but your point makes sense.

Yeah, but someone in Springfield or Reston is not gonna drive to Petworth for a few cents per gallon.

Once you get out of the Beltway, gas gets cheaper fast. Aroud Haymarket, there are a few places where gas is at least 10cents cheaper than closer in.

In other words: NoVa is not Arlington. Culpepper is NoVa. Frederickburg is NoVa. Manassass is NoVa. Nobody from there is gonna drive to DC to get a few cents off.

by Jasper on Dec 19, 2012 5:04 pm • linkreport

Places like Phoenix, Dallas, and Denver have already left Baltimore behind by funding and completing major transit projects during the past decade. The irony is that these places were built around automobiles, while Baltimore, a denser, more historic and more walkable city in almost every way, can barely get a new light rail line after more than 10 years of planning and deliberation.

by Mark on Dec 20, 2012 10:19 am • linkreport

@Mark

It's especially sad since more people ride transit in Baltimore than any of those cities.

by MLD on Dec 20, 2012 10:35 am • linkreport

@Jasper

I am well aware of price fluctuations. My wifes in-laws are in Richmond, my family is in Oakton and Arlington, and my parents have a river house in Tappahannock we visit regularly.

The point is not that people from VA would drive to DC to get gas, it is that if DC and MD raise prices, and VA does not follow suit, that people in DC could/would drive to Arlington to get gas. Especially if it was .50c cheaper. Perhaps not just to get gas, but plenty of people are in VA quite regularly, so everyone would make sure to fill up at that time, so gas sales in DC and MD would go down, taking out some of the corresponding revenue that otherwise would have been raised by a gas tax increase. Hope that makes sense.

by Kyle-W on Dec 20, 2012 11:31 am • linkreport

Raise my gas tax ... really? While I see the incredible benefits of transportation infrastructure in DC and Baltimore, I now live in St. Mary's County after Steny Hoyer decided his district needed more jobs. Thanks to him, my job was moved from Crystal City to Patuxent River NAS. What would these projects do for anyone in any rural area in MD other than drain our pockets? Now if you want to talk about commuter rail to Lexington Park via Waldorf, I'd be glad to chip in and would support a $.50/gal tax on gasoline, but all you're asking for at this moment is my money and support while giving me zero benefits. Let the people in the areas that are benefiting from these projects pay for them. I fully support raising the gas tax in Montgomery, PG, Howard & Baltimore counties to pay for these projects. OK ... Frederick too.

In the meantime ... petition Steny Hoyer to move my job back to Crystal City where I can get out of my damned car and use Metro once again!!

by Johnny on Dec 21, 2012 6:30 pm • linkreport

Add a Comment

Name: (will be displayed on the comments page)

Email: (must be your real address, but will be kept private)

URL: (optional, will be displayed)

Your comment:

By submitting a comment, you agree to abide by our comment policy.
Notify me of followup comments via email. (You can also subscribe without commenting.)
Save my name and email address on this computer so I don't have to enter it next time, and so I don't have to answer the anti-spam map challenge question in the future.

or