Don Fry Commentary on WYPR
Why are the Greater Baltimore Committee and other business leaders calling for a 10-cent increase in Maryland’s gas tax?
The answer boils down to two things – priorities and timing.
First, Governor O’Malley’s fiscal plan confirms my fear that the full gravity of Maryland’s need to increase funding for new highways, transit, port and airport facilities has been lost in the rush to close the state’s projected $1.7 billion General Fund operating deficit.
The governor’s plan proposes to raise almost $2 billion in new revenue, much of it from business and business owners. Yet it does not adequately address the top business priority and, in my opinion, the most pressing fiscal challenge facing the state – transportation infrastructure.
The governor’s plan includes $392 million in new annual revenue for the state’s Transportation Trust Fund. That’s a lot. But it’s not nearly enough because the first $250 million will go toward system preservation – not new projects, say state officials. Another $50 million is earmarked for a new federally-mandated state match for the DC transportation system.
So, of the governor’s $392 million in added revenue to transportation, only $92 million would go to new capital projects. That’s why the transportation fund needs a minimum of $600 million in new revenue to adequately address the state’s backlog of planned, but unfunded transportation projects. A 10-cent gas tax would close that funding gap.
The state’s transportation fund is at a critical tipping point right now. Most of its revenue sources, including the gas tax, are not inflation sensitive. And transportation operating costs are increasing. Money available for capital projects will actually begin to decrease in the next fiscal year.
Under existing revenue trends, in five years available funding for new highways, transit and other projects would be 38 percent less than today. The capital funding shortage in 2012 would be more than $700 million.
Given current congestion and projections for growth, Maryland needs to find a way to elevate transportation funding to its top fiscal priority.
The time to do it is now … not later.
For the Regional Business Report, this is Don Fry, President and CEO of the Greater Baltimore Committee, for 88.1 WYPR, your NPR news station.