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O'Malley: Road funds may need gas or sales tax hike

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Local,Maryland,Transportation,Andy Brownfield,Taxes

ANNAPOLIS -- Maryland Gov. Martin O'Malley said Wednesday that the General Assembly may consider two ways to increase transportation funding that failed last year: tying the gasoline tax to inflation or increasing the sales tax.

O'Malley told Baltimore talk show host Marc Steiner a few hours before the 433rd General Assembly was sworn in that lawmakers could vote to index the gas tax to inflation or raise the 6 percent sales tax by a penny and apply that to transportation.

"On this issue of transportation, we have fallen short of what we need to do, and it's not because of the lying, thieving politicians," O'Malley said in response to Steiner's implication that Maryland officials have raided the transportation trust fund to pay for other needs.

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Maryland's gasoline tax is 23.5 cents per gallon and hasn't been raised since 1992. One option would index the tax to the U.S. inflation rate, which was 1.8 percent in November.

"We have had a flat tax on gasoline for the last 30 years. That has not risen even though the price of everything including gasoline has raised threefold," O'Malley said.

However, gas use has been declining as manufacturers create more fuel-efficient cars and people drive less, he said, meaning less revenue is coming in.

The other option would raise the state's sales tax from 6 percent to 7 percent, with the extra revenue going toward transportation.

Both options would raise about $700 million a year, O'Malley said. He told Steiner he is still working with legislative leaders to determine which proposal to present to the General Assembly.

Across the Potomac River, Virginia Gov. Bob McDonnell on Tuesday proposed scrapping his state's 17.5-cent gas tax and instead raising the sales tax to 5.8 percent from 5 percent, with all the extra money going to transportation.

However, the state is poised to bankrupt the transportation fund in the next five years, the state's top budget analyst has told lawmakers. Roughly 80 percent of the funds for transit and 100 percent of the state highway administration's funds will have been spent by 2018, just from maintaining current infrastructure.

abrownfield@washingtonexaminer.com

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