No new — or higher — taxes in proposed state budget
Wednesday, 23 January 2013 13:02

Gas tax increase still a possibility

by Bill Gates

    As expected, Maryland’s improved financial status resulted in Gov. Martin O’Malley submitting a budget last week that included no proposed tax increases or deep spending cuts.
    The $37.3 billion budget also includes a three percent pay raise for state employees; in recent years, they instead had to accept furloughs to help balance the budget.
    One issue not addressed  by the governor’s proposed budget is how to raise $700 million said to be needed for the state transportation fund.
    Recent years have seen increases in the state sales tax, taxes on people making over $500,000 and higher taxes on alcohol and cigars as the state legislature dealt with a structural deficit of nearly $2 billion.

Thanks to higher-than-expected tax revenues and an improving economy, the structural deficit is now believed to “only” be between $10 and $20 million.
    “We’re at the point now where we’re seeing the light at the end of the tunnel,” Del. Joseph “Sonny” Minnick (6th District) said. “The economy is getting better. By next year, we should be in good shape.”
    With 2014 being an election year, Minnick said if there were going to be any tax increases or new taxes, “it would happen this year.”
    A new gas tax intended to put money into the state transportation fund is still a possibility.
    “There’s been nothing from the governor’s office about raising the gas tax,” Minnick said. “That’s not to say it won’t happen. It may be up to the House and Senate leadership to put it in.”
    Minnick and the other members of the 6th District delegation, Sen. Norman R. Stone and delegates John Olszewski Jr. and Michael Weir Jr.,  have pledged to oppose any increase in the gas tax.
    “We have thousands and thousands of dollars each day going into the transportation trust fund,” Minnick said. “And there’s millions and millions of dollars already in there.”
    One solution is to stop raiding the transportation trust fund to use the money for other needs, Minnick said.
    “I’ve served under four governors, and every one has taken money from the transportation fund for other reasons,” he said.
    Minnick is supporting a bill this session that would prevent a governor from taking money from the transportation fund without first going through the legislature.
    But, as that would require an amendment to the state constitution, the bill would need to pass by a two-thirds majority and then go to referendum.
    “I don’t see it passing this year,” Minnick admitted.
    Other aspects of the governor’s budget include $6 billion for education; $3.7 billion for construction projects; $25 million to upgrade school safety with shatterproof glass and automatic locking doors (in reaction to the shooting tragedy at Newtown) as part of an overall $336 million for school construction projects (which includes $25 million to upgrade air-conditioning systems); $32 million for the state university system to increase enrollment in science and technology programs; $31.5 million to help clean the Chesapeake Bay and $36 million for other environmental projects.
    The budget also adds $153 million to the Maryland “rainy day” fund in case the state sees a reduction in funds from the federal government.
    “The budget has just been unveiled, and we’re obviously still trying to digest some of it,” Olszewski said. “There’s no tax increases or revenue increases. There’s some growth included, along with some additional cuts.”