An article yesterday incorrectly reported Maryland's gasoline tax. It is 23.5 cents a gallon. (Published 09/25/1999)

Maryland Gov. Parris N. Glendening said yesterday that revenue pouring in from the booming economy means there's no need to increase the state gas tax to fund transportation projects during the last three years of his term.

The announcement came as Glendening outlined more than $1 billion in new transportation spending. Calling it the largest construction program in state history, he announced a series of new or expanded projects, including some of the first extensions of mass transit rail operations in the Washington area since Metrorail lines were laid out.

Earlier this year, Glendening said he thought an increase in the 32.5-cent-a-gallon gas tax might be necessary. But lawmakers balked at the idea, unwilling to take on the fight at a time when the state is racking up large surpluses. The governor's decision eliminates what was expected to be the most contentious battle over money in next year's General Assembly session.

"We do need not a gas tax [increase] this year or the remainder of this administration," Glendening said. Although he had considered the need for a tax increase, he said, "no one anticipated the economy being this strong."

The surge in revenue from taxes and licensing fees paid by those purchasing new vehicles--especially sport-utility vehicles, which are taxed at a higher rate than cars--is providing new cash. That money will help pay for new bonds issued for transportation costs. The state also is the beneficiary of $485 million in new federal funding.

The six-year plan includes $26.6 million to buy rights of way and begin planning to extend Metro's Blue Line out to Largo in Prince George's County.

There is also $6 million to begin planning for a transit way in Montgomery County that would link Bethesda to Silver Spring. Supporters of the project say the transit way could accommodate either buses or light rail. But it has opponents, too, including Montgomery County Executive Douglas M. Duncan (D), who fears the project would take away money that could be used to build a rail line outside the Capital Beltway.

Glendening also wants to spend $100,000 to build a bypass around Brookeville in northern Montgomery. The governor, after first arguing that a new road would spur unwanted development around the tiny town, decided to heed residents' wishes for relief on congested Georgia Avenue, the main street through Brookeville.

The proposal also includes $800,000 to begin planning a new interchange to link Contee Road south of Laurel to Interstate 95.

Also included in the $1.1 billion transportation program is a series of road and interchange improvements costing $200 million that Glendening has proposed instead of constructing an intercounty connector highway. On Wednesday, Glendening announced he was canceling 50-year-old plans for a highway linking upper Montgomery and Prince George's counties because of environmental concerns.

Another $200 million over the next three years will come from the state's general fund--not usually tapped to pay for transportation projects--to make Maryland's contribution toward a new Woodrow Wilson Bridge. The federally owned bridge is in serious need of repair, and a replacement has been pegged at $1.9 billion. In an agreement with the federal government, Maryland and Virginia will each pay $200 million. Congress has agreed to pay $900 million, and the Clinton administration has proposed spending an additional $600 million.

State Sen. Barbara A. Hoffman (D-Baltimore), chairman of the Budget and Taxation Committee, had urged that the bridge contribution come from general funds because the state's main budget has a surplus projected at $583 million. Glendening said yesterday that the surplus could rise to nearly $700 million by the time the budget year ends next June 30.

"The Woodrow Wilson Bridge is not going to have to be redone in our lifetimes," Hoffman said yesterday. That justifies the one-time expense coming from money not normally spent on transportation, she said.

Hoffman said the massive transportation spending program just about stretches the limits of what can be done at any given time. "We can't spend it any faster than that," she said.

Indeed, that level of spending has not been seen in more than a decade.

"We're able to spend as much money on roads now as when the federal government was building interstates, and we're doing it without a tax increase," said Senate President Thomas V. Mike Miller Jr. (D-Prince George's). "It's an unbelievably positive occurence."

While Glendening said he expected a "knee-jerk" reaction from some legislators for additional tax cuts, he said he would not support any across-the-board reductions. Nor, he said, would he favor accelerating the already approved phasing in of a 10 percent income tax cut.

Glendening said he had already cut 20 taxes and raised only one--the cigarette tax last year, to discourage smoking.

Instead, he said, he would continue to focus on using the money for one-time expenses such as school construction, college facility improvements and transportation projects, rather than borrowing money for those projects.

But he did say he believed Maryland and the nation had entered a new economic era with productivity gains that are "suppressing the normal cycles" of expansion and recession.

CAPTION: Gov. Parris N. Glendening says there's no need to raise the gas tax in the last three years of his term to help fund transportation projects.