ANNAPOLIS — Gov. Martin O'Malley told House and Senate lawmakers Wednesday that failing to raise Maryland’s gas tax could lead to crumbling roads and bridges in the future, and that they should pass his proposal despite its lack of popularity with residents.
Mr. O'Malley, a Democrat, touted his proposed 6 percent sales tax on gas while testifying before the Senate Budget and Taxation Committee and at a joint hearing of the House Ways and Means and Environmental Matters committees.
Legislators have said a gas-tax hike appears unlikely during this year’s General Assembly session because of rising gas prices, public outcry and several other tax increases already being considered.
The governor’s proposal would impose a 2 percent sales tax on wholesale purchases and tack on 2 percentage points in each of the next two years. Any scheduled increase would be postponed for one year if gas prices rise by more than 15 percent in that year.
Mr. O'Malley says the increase eventually would generate $613 million a year for road and transit improvements and create 7,500 jobs.
He acknowledged that current economic circumstances are tough, but he said the state — which has not raised its current 23.5-cents-a-gallon excise tax on gas since 1992 — needs better roads and cannot afford to put off the need any longer.
“Roads do not upgrade or maintain themselves,” he said. “No one has wanted to address this problem for 20 years. And every year, therefore, our people are paying an increasing cost for this inaction.”
Mr. O'Malley was joined by state transportation officials and local office holders who spoke in favor of the gas tax increase, arguing that road and transit improvements could pay long-term dividends by creating construction jobs and attracting businesses and new residents.
They described roads in Maryland as being among the most congested in the nation and said residents already are paying a “hidden tax” in the form of hours lost and gas burned while sitting in traffic.
“We know these are difficult times and difficult decisions,” said Prince George’s County Executive Rushern L. Baker III, a Democrat. “But the reason we need the revenue is so that we can provide the quality of life that people in Maryland deserve.”
Opponents disputed many such arguments, contending that a tax increase will deliver a crushing blow to families that depend heavily on vehicles and are already struggling financially.
Others said the increase could have a catastrophic effect on business in counties along the state’s borders by driving consumers out of state.
“We’re pretty sure that with the amount of business we’ll lose it’s going to lose jobs,” said F. Peter Horrigan, president of the Mid-Atlantic Petroleum Distributors’ Association.
The governor’s office has said the increase eventually could raise gas prices by as much as 20 cents per gallon. State transportation officials said it could vault Maryland from ranking 31st nationwide among states in gas prices to having the sixth-most expensive gas in the nation.
While the governor is still pushing for an increase, leading lawmakers have said his proposal is looking less and less likely with gas prices climbing toward $4 a gallon and legislators already looking to pass a budget that includes several other tax hikes, including a broad income-tax increase on most residents.
Mr. O'Malley said he is willing to work with lawmakers and amend the bill. He even said he would even consider a constitutional amendment to ensure funds raised by the tax go only toward transportation and can’t be siphoned off for other uses, as was done in past years.