O’Malley Intent on Shoring up Transportation Funding, Backs Away From Gas Tax Hike

Governor O’Malley unveiled his plan today to head off a major impending budget shortfall in Annapolis. He has proposed to raise corporate income taxes from 7 to 8 percent with half the increased funds going to higher education and the other half going to transportation projects such as (in College Park’s case) the ICC, the Purple Line, and Route 1 reconstruction. Since Maryland’s gas tax (which is not pegged to inflation), even despite huge increases in the cost of road construction, hasn’t been raised since 1992. O’Malley still plans to join dozens of other states in indexing MD’s gas tax to inflation (meaning .7-.8 cent increases every year), but he has now backed away from the significant up-front increases (23.5 cents per gallon) that he spoke of just a few short month ago. The governor has also proposed to increase the (more politically palpable) titling tax from 5 to 6 percent of a car purchase price. It’s unfortunate that the governor has bowed to the opposition on such an important issue. From an economic perspective, gas taxes are the surest way to make drivers pay for the infrastructure they use. At least there is some end in sight to the deficit.
> O’Malley to Stump for Tax Increases, Washington Post

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