Moving to defuse a politically explosive issue, Gov. Harry R. Hughes today offered the Washington suburbs of Maryland an extra $6.5 million to help pay their $29.5 million share of Metro's projected operating losses this year.
Hughes said his proposal to bring the state's contribution up to $13 million this year -- nearly half of Metro's projected deficit in Maryland -- is a temporary solution that would allow time to develop a more lasting financing plan.
The proposal -- which requires approval of the General Assembly -- received little support among Mongomery and Prince George's county legislators who are seeking full state funding of their obligations to the cost of operating the Washington rail and bus system.
"It's no more than a band-aid approach," said Sen. Peter Bozick, a Prince George's Democrat and cosponsor of a bill that would return 10 percent of the state's sales tax revenue to the counties for transportation-related uses.
Hughes did receive at least qualified praise for his proposal from U.S. Transportation Secretary Brock Adams, who visited the Maryland legislature today to press his argument in favor of a specific funding mechanism to pay for future Metro costs.
At a joint press conference with Hughes, Adams reiterated his warning that Maryland, Virginia and the District of Columbia must dedicate some tax to pay for Metro if they expect the federal government to commit itself to completion of the 101-mile system.
"We don't want a subway system that is all built but there isn't enough money to operate," said Adams, who was making his first trip to a state legislature -- he also appeared before a Senate committee to seek state financing for transportation projects.
According to Hughes' plan, the state would take that portion of the tax on sales of new cars that normally goes to the general fund -- $28 million this year -- and distribute it to the counties and Baltimore. The Washington suburbs would receive $6.5 million.
The onetime-only grant -- it would be given out under a formula factoring in the number of road miles and number of registered vehicles in each county -- would have to be used for transportation purposes, anything from repair of bridges to Metro losses.
Hughes acknowledged that the plan offers only a short term cure for the problem of Metro operating losses. But he said it would provide time to study more complex solutions, such as raising the gasoline tax or corporate income tax.
The one approach he singled out as "unacceptable" is the one that has attracted wide support among Washington area legislators -- rebating one-half cent of the sales tax to the counties for transportation uses.
That proposal would channel another half cent of the sales tax into the state's transportation trust fund, which finances all transportation projects. The price tag for transferring funds to the counties and trust fund would be $140 million a year.
"Before we start toying with that source of revenue (sales tax), we have to take a long hard look at state and local relations because the sales tax produces revenue" for the counties and Baltimore, said hughes, who refused to say if he would veto such a measure.
Hughes is not alone in his opposition to the sales tax rebate idea. Republican, rural and Baltimore suburban lawmakers are steeling themselves for an all-out fight that could be a replay of the 1976 imbroglio over the Baltimore subway.
"Why should my people on the Eastern Shore pay for this project?" asked Sen. Walter Baker, a Democrat from Cecil County. "I can see it coming. It's going to cost us more and grease this state along the track of socialism."
Baker and other members of the conservative-rural bloc believe that the sales Tax rebate approach would only prompt the state to ask for an increase in the 5 per cent tax to offset the money that would be sent to the subdivsions.
The Hughes proopsal was designed to appease all factions and find a politically safe middle ground. It offers help to the Washington suburban counties to pay for Metro expenses while providing the same benefits to the rest of the state.
"It's fair and it's equitable," Hughes said at the news conference.
For Montgomery and Prince George's lawmakers, the proposal was inadequate, even though it offers some relief. The extra $6.5 million would be added to $6.5 million already in this year's budget and $9 million in projected federal aid.
That would leave only $7.5 million of the $29.5 million be paid by the two counties -- less than their share of Metro operating costs in the past fiscal year. "It helps," conceded Montgomery Sen. Victor Crawford. "But it's just not enough."