Gov. Harry R. Hughes said today he will submit a plan to redirect a portion of the state's general fund revenues to help Prince George's and Montgomery counties pay their $27 million share of Metro's projected deficit this year.
However, although Hughes has decided to seek legislative approval of a plan that would free an extra $28 million for a variety of transportation uses, he has not yet resolved how much of that amount should be given to help the Washington suburbs with THEIR Metro payments.
The exact amount could be decided when he meets later this week with delegations from the two counties who have been pressing for full state support of their share of Metro's operating losses. The proposed budget provides only $6 million for that purpose.
Hughes' plan to help finance the deficit of the Washington area bus and rail system would draw on that portion of the state's excise tax -- a 5 percent levy imposed on new automobile sales -- that is now earmarked for Maryland's general treasury fund.
At the present time, 4 of every 5 cents raised by the excise tax goes into the state transportation trust fund that pays for for all transportation projects. The remaining 1 cent goes into the general fund to cover a wide variety of state expenses.
Under Hughes' plan, the 1 cent now going into the general fund -- amounting to $28 million in the coming year -- would be rechanneled into the transportation trust fund and made available for the Metro operating deficit.
"It's an appropriate way of raising revenues to pay for (the deficit)," Hughes said in an interview. "I would rather raise the money from transportation sources (excise fund).That's the traditional way its been done."
In choosing the excise tax approach, Hughes rejected a proposal developed by Montgomery and Prince George's counties to give 10 percent of the state sales tax revenue back to the counties for their own use, and pay another 10 percent into the transportation trust fund.
"We can't afford to do that," said Hughes, adding that the plan would cost the state treasury $140 million.
In deciding how much of the $28 million to propose for Metro, Hughes said, he will have to consider what is politically feasible in a legislature suspicious of large public works projects, especially ones in the wealthy Washington suburbs.
One proposal under consideration would require the state to absorb at least 40 percent of the deficit owed by the two counties. But Washington area legislators are holding out for at least 50 percent funding, said Montgomery Sen. Laurence Levitan.
According to the current formula for the transportation trust fund, 17.5 percent goes to Baltimore city, 17.5 percent to the rest of the state, and the balance to the Department of Transportation to use at its own discretion.
Among plans weighed by Hughes. all or part of the funds earmarked for the transportation agency would be used for the Metro deficit -- that would mean $18.2 million this year to augment the current budgetary allocation of $6.5 million.