“We realize now is the time to move on this,” said House Majority Leader Kumar P. Barve (D-Montgomery), citing the recent passage of a transportation funding plan in Virginia. “We are in competition with Virginia with respect to how quickly you can get to a meeting, how quickly you can get from Point A to Point B.”
A plan introduced this month by O’Malley (D) was projected to yield an additional $3.4 billion for transportation projects over five years, including more borrowing. The money, the governor said, is needed for a transportation fund that has no money budgeted for new highway construction or mass transit after 2017.
O’Malley’s plan would have trimmed 5 cents off the state’s 23.5 cents-per-gallon gas tax. The lost revenue would have been more than offset by a new 4 percent sales tax on gas, phased in over two years. The gas tax, which has been flat, also would have risen in future years to reflect inflation.
As rewritten by the House, the tax would remain at 23.5 cents, but the new sales tax would be smaller — a total of 3 percent — phased in over three years. “To lower something and raise something else didn’t seem to make a lot of sense to the House,” Barve said.
Like O’Malley’s plan, the House proposal seeks to steer revenue generated from taxing Internet sales to transportation, a provision that requires action by Congress. If the federal legislation is not passed, the House plan, like O’Malley’s, would add 2 percent more to the sales tax. Both plans would take effect July 1.
The four committee votes against the plan came from Republicans, some of whom said there would be less of a need to raise taxes if the state had better managed its transportation fund.
Del. Ronald A. George (R-Anne Arundel) also said the bill would provide an incentive for companies dependent on transportation to fuel their vehicles across state lines. “It’s just another reason not to do business in this state,” George said.