Maryland Gov. Harry Hughes, plans to propose funding the state's transportation needs, including the Washington Metro, by increasing car registration fees and using revenues from two existing taxes, according to sources.
Hughes has changed his mind about a plan he was considering last week to increase the gasoline tax in the face of heavy opposition from the General Assembly leadership and suburban Washington legislators, the sources said.
The proposal Hughes plans to unveil for county officials Wednesday would also increase the share of state funding Montgomery and Prince George's counties receive to pay the annual cost of operating Metro.
The two counties would receive $22 million in transit aid next fiscal year, a $9 million increase over this year.
Hughes' proposal would shift part of the corporate income tax the state's general fund to its transportation fund, which is the source of revenues for roads and transit systems. Neither of those taxes would be increased.
The plan would increase the cost of registering cars in Maryland -- currently $20 for cars weighing less than 3,700 pounds and $30 for cars over that weight -- to $25 and $38.
Hughes has been studying various proposals for the next month to deal with the state's most pressing financial concern, transportation funding, and legislators have been anxiously awaiting his proposal. He is expected to discuss his plans Wednesday with legislative leaders after administration staffers have provided him with projections of how much revenue each proposal will provide.
Hughes plans to propose increasing the share the state pays of the annual operating costs of the Washington suburban Metro system to 75 percent. The state currently picks up about 40 percent of the costs in Montgomery and Prince George's counties, and suburban legislators have been inordinately pleased with any suggestions to increase the share by that amount.
Transfer of a portion of the corporate income tax and the excise tax on cars would add almost $70 million to the transportation issue.
Montgomery and Prince George's Metro funding needs are expected to total about $35 million during the same period, according to Metro officials.
Significantly, under Hughes' proposal, all of Baltimore's transit operating deficit would continue to be paid by the state. It is agreed that any move to decrease the state's share would be strongly opposed by Baltimore legislators and would jeopardize the chances of Hughes' plan.
Suburban Washington and Baltimore legislators agree that they need each other's support on this issue to survive traditionally virulent opposition from rural legislators to transit funding.