Gov. Harry Hughes revealed today that he will consider using part of the state sales tax for funding the operating costs of the Metro system -- a concept he summarily rejected last year.
Suburban Washington legislators, who met with the governor this afternoon, hailed his willingness to reconsider the sales tax approach as an important breakthrough in their efforts to obtain necessary state money for the regional subway system.
"Certainly it's a change of policy, if I were to do to that . . . a change in my thinking," Hughes acknowledged in an interview tonight.
Suburban legislators -- particularly those from Prince George's County -- have long argued that the state should use the sales tax as a source. Hughes told legislative leaders that he might consider designating one-quarter of one percent of the current five percent tax to the Metro system.
That would generate $38 million annually, local officials estimate, enough to cover three-quarters of the annual operating payments of Prince George's and Montgomery counties. And enough to make the local politicians inordinately happy.
As one senator from Prince George's said: "We would all roll over for any of (Hughes') other legislation if we got this."
Hughes statements came as a task force appointed to study the state's transportation funding met and approved recommendations that mass transit systems be funded in part through new taxes, including an increase in the state gasoline tax and a regional sales tax in suburban Maryland.
Those proposals prompted a group of legislative leaders -- many of whom oppose new taxes for transportation -- to seek the meeting with Hughes. At that meeting, Hughes agreed to consider "other sources" for transit fundng, including the sales tax.
As a result, members of the legislative leadership made no wholesale changes in the recommendations adopted by the task force this evening.
However, House Speaker Benjamin Cardin -- a Baltimore Democrat who also sits on the task force -- did manage to win approval of one change in the report, angering the suburban Washington members of the task force and increasing the likelihood of a rift between the Baltimore and Washington-area delegations when the transportation measures are debated by the General Assembly.
According to Cardin's proposal, the state's commitment to fund 75 percent of Metro's operating deficit would not be open-ended. It would require that both the Washington and Baltimore subway systems make up half of their operating deficits through fare box receipts if they want the full 75 percent funding by the state.
Washington-area members of the task force protested that the Cardin proposal is unfair, since it costs more per passenger to operate a combination urban-suburban rail system like Metro's that it does to operate a system in a densely populated area like Baltimore.
If Metro's fare failed to make up 50 percent of the operating deficit, it would be up to Montgomery and Prince George's counties to find additional money locally to supplement the state funds.
Hughes, who said he had rethought the sales tax option Wednesday night, added that he had not necessarily rejected the idea of asking the legislature for an increased gasoline tax, "I didn't say the gas tax was dead," he said. "But I don't want it to appear that I am favoring it. I haven't made up my mind."
Legislative leaders said that part of the reason for Hughes' reconsideration of Metro funding -- and their opposition to taxes -- is due to new estimates by state officials that the state surplus this year may rise far above the $229 million already projected.
The increased revenues, legislators noted, mean that the state probably could afford to designate part of its current sales tax for transportation funding and still have sufficient money for other programs.
Both the legislature's leadership and Hughes have said that a primary goal of this year's session is to establish a permanent funding source for Washington's Metro -- a requirement set by the primary Metro financier, the federal government. So far, however, there has been no agreement on what that funding source will be.
Some local legislators were already predicting yesterday that the Metro funding question may be nearly resolved. But legislative leaders who met with Hughes warned that a solution was still a few steps away.
"It's to early to say that," said House Majority Leader Donald Robertson (D-Montgomery), one of those who met with Hughes. "The consensus is too fragile to predict what may result," added House speaker Ben Cardin (D-Baltimore City).
Privately, some legislators predicted that Hughes' position on Metro funding might turn increasingly toward use of the sales tax as new state estimates of the surplus are reported.