A Maryland task force will recommend a gasoline tax increase and possible 1 percent sales tax increases in Montgomery and Prince George's counties to finance Metro operation and construction along with other state transportation needs, key officials revealed yesterday.
The funds generated by these tax increases -- estimated at about $90 million for the first year -- would be used to repair the state's deteriorating highway system as well as support mass transit programs in the Baltimore and Washington areas.
The proposal, if approved by the 1980 General Assembly, would put Maryland ahead of Virginia and the District of Columbia in meeting the U.S. Department of Transportation's mandate that the three jurisdictions establish "stable and reliable revenue sources' before the federal government provides more aid for Metro construction.
Key provisions of the proposal include:
A change in the state gasoline tax -- currently 9 cents per gallon -- that would mean a minimum of a penny a gallon increase next year and continuing increases or decreases in subsequent years, based on the rate of inflation or deflation. The first year's tax hike should increase revenues from about $190 million to $210 million.
An authorization for transit districts in the state, including the Washington suburbs as well as the Baltimore metropolitan area, to impose up to a 1 percent general sales tax for transportation purposes. If both Prince George's and Montgomery counties imposed the tax, they could raise a total of $45 million annually. The present sales tax is 5 cents on the dollar.
The proposed authorization for a general sales tax for a Washington suburban transit district would give Montgomery and Prince George's counties the ability to remove their entire Metro operating costs from the politically sensitive property tax.
However, that proposal met with an early cool reaction.
Ken Duncan administrative assistant to Prince George's County Executive Lawrence Hogan, said that Hogan is opposed to any sales tax increase. Prince George's County Councilman Francis B. Francois suggested the proposal might best be submitted to referendum. Montgomery County Executive Charles Gilchrist said that the sales tax "is the one part of the [transportation] package I want to look at most seriously. There is a big state surplus."
The assumption by the state of 75 percent of the annual cost of operating the transit systems in suburban Washington and in Baltimore. That would mean an equalization between the state's treatment of its two major metropolitan areas in transportation financing. Currently all of Baltimore's annual operating deficit is paid by the state, but only about 40 percent of the Montgomery and Prince George's County share of Metro is state-supported. The rest comes from local property taxes.
Continued payment by the state of all the local construction costs for both the Maryland share of Washington Metro and the local share of the Baltimore subway. It is anticipated that the Maryland share of completing the 101-mile Washington subway will be about $180 million over the next decade.
An increase of $10 in the annual cost of registering a car in Maryland. Cars weighing less than 3,700 pounds would cost $30 instead of $20; those over 3,700 pounds would cost $40 rather than $30. The increase should add an estimated $20 million a year to the state transportation fund, which now receives about $88 million annually from that source.
Shifts from the state's general fund to the transportation fund of part of the corporate income tax and part of the titling fee for motor vehicles. There would be no increase in those taxes, however.
The package was outlined yesterday by Morton Weinberg, deputy director of finance for the Maryland Department of Transportation, who, along with many other state and local officials from Washington, Maryland and Virginia, was attending the annual Metro meeting at Airlie House in Warrenton, Va.
The proposal was created by a committee with broad statewide representation that was appointed by Gov. Harry Hughes and the legislature and chaired by state Sen. Ed Mason (R-Cumberland).
It is the first substantive step in a process that must bring the General Assembly to a resolution of the state's growing transportation financing needs. Those needs extend to a deteriorating highway system as well as mass transit in the metropolitan areas.
The main source of revenue for the state's combined transportation account has been the 9-cent-per-gallon gasoline tax. That tax, however, has not been increased in years. And, because it is not tied to inflation, it does not keep pace with the costs of constructing new transportation facilities.
Some Maryland officials expressed concern that the task force proposal, while good for mass transit, might shortchange highway needs. Washington area officials also wonder whether Baltimore would be willing to accept a reduction in state transit aid from 100 percent to 75 percent.