O’Malley Reaches Out For Help In Funding Road Projects

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By Ann Marimow

Gov. Martin O'Malley asked Maryland business leaders Wednesday night for help in boosting investment in the state's growing backlog of road and transit projects. The governor did not put forward a specific proposal for paying for such projects, but warned that neglecting the state's infrastructure would come at a cost.

"There are no easy choices. There is no 'easy button' to press," O'Malley said in his remarks to the Maryland Chamber of Commerce in a hotel ballroom near the BWI airport. "There is no simple or cost-free -- or even cost-neutral option."

O'Malley used his 20-minute speech to continue to try to build support for the possibility of addressing the state's transportation challenges this fall when lawmakers are expected to meet in a special session to redraw congressional district lines. A blue-ribbon commission has recommended raising an additional $800 million a year in transportation funding. Among the millions of dollars in projects the governor mentioned was the light rail Purple Line that would connect Bethesda and New Carrollton.

During the General Assembly session this year, the chamber's leaders were supportive of an unsuccessful legislative proposal to raise the state's 23.5-cent-per-gallon gas tax -- the largest source of revenue for Maryland's transportation trust fund. The gas tax was last raised in 1992.

But O'Malley suggested Wednesday that raising the gas tax alone would not go far enough, calling it a "declining revenue source" as new cars and trucks get better mileage, a greater number of workers telecommute and others turn to public transit. "What the fairest and best mix of [revenue] choices is, I can't tell you that right now," O'Malley said after his speech.

Raising the gas tax at a time when drivers are paying close to $4 a gallon would be a difficult political pitch.
In response to the governor's remarks at a transportation funding event last week, other business leaders spoke out against a possible increase in the gas tax.

"These are tough times. Gas is already over $4 a gallon and it is likely only going to go higher -- and that's without any state tax increase," said Kim Burns, president of the group Maryland Business for Responsive Government, co-chaired by former governor Marvin Mandel and Ellen R. Sauerbrey, a former GOP nominee for governor.

In a letter to state Comptroller Peter Franchot last week, O'Malley also floated the possibility of enhancing the state's ability to collect sales and use taxes from online purchases. The governor asked the comptroller to investigate "the severity of this 'loophole'" and cited an academic study that estimated Maryland loses more than $160 million in unpaid taxes from online sales.

Maryland businesses, he wrote, may be "unfairly disadvantaged by what amounts to an uneven playing field with their online competitors."