“Everybody wants no taxes, but they want good roads too,” said Maryland Sen. Guy Guzzone, chair of the Budget and Taxation Committee. “We have to come up with the balance.” (Maryland Reporter photo by Glynis Kazanjian)

Are we being set up for state tax increases to fund transportation?

That’s the question that came to mind after Maryland Transportation Secretary Paul Wiedefeld announced that the state would need to cut highway and transit projects by 8%, as well as state aid for county roads to compensate for a projected $3.3 billion deficit in the state Transportation Trust Fund in coming years. As expected, local officials and residents impacted by the cuts squealed.

One line in the six-year Consolidated Transportation Program lays out the problem. “Over the life of the CTP, MDOT’s revenues are expected to grow by one percent annually while operating costs are increasing seven percent per year.”

Any householder or manager can recognize the stark reality of the situation: Expenses are going up, income is going down. Solution: cut expenses or get more income.

“Nobody is being set up for a tax increase,” Howard County state Sen. Guy Guzzone, D-District 13, chair of the Budget and Taxation Committee told me. “I’ve been saying for multiple years” that something needs to be done to fix transportation funding. “It wasn’t hard to predict,” said Guzzone.

Costs are up, revenue is down

The expense picture is pretty obvious. Inflation has raised construction costs dramatically everywhere, both for labor and for the raw materials that go into highways, bridges and transit vehicles. These are paid for mostly by the gasoline tax (24%), federal aid (20%) and vehicle titling taxes (19%), along with registration fees and tolls. Transit fares have never fully paid for those services.

While gas prices have spiked and Maryland’s fairly high gasoline tax is indexed to inflation, revenues have been down for the last four years because of good news for the environment. Cars and trucks have been getting better mileage, and the number of electric vehicles and hybrids has been rising. Maryland’s 70,000 all-electric vehicles put the same wear and tear on the roadways but generate no gas tax revenue. Hybrids tend to be heavier due to their batteries but pay far less gas-tax revenues than similar sized vehicles.

“Everybody wants no taxes, but they want good roads too,” said Guzzone. “We have to come up with the balance.”

That’s why Guzzone and all the members of his Budget & Taxation committee co-sponsored legislation in the last session to create the Transportation Revenue and Infrastructure Needs Commission to come up with recommendations to fix the transportation fund deficit. 

Guzzone is on the commission, as is Howard County Executive Calvin Ball, 2023 president of the Maryland Association of Counties, along with 28 other officials and representatives of business, unions and environmental groups.

Raise fees for EVs, tolls

The commission’s recommendations came out Dec. 13. Number 1, “The Maryland General Assembly should authorize the Motor Vehicle Administration (MVA) to collect an additional registration fee for electric and/or hybrid vehicles.” The commentary on this recommendation suggests a fee as high as $200, noting that 33 states have passed such an extra charge (an average of $128 per vehicle) and yet have seen no reduction in demand for EVs. The $200 fee (half that for hybrids) was seen as an average of what similar gas-powered vehicles would pay in gasoline taxes.

The second recommendation was the legislature “should require the Maryland Transportation Authority (MDTA) to adjust toll rates to maximize toll revenue in order to generate additional revenues to help support Maryland’s broader transportation system.”

The MDTA is an independent agency run by an appointed board that manages Maryland’s toll bridges, tunnels and highways, and uses those revenues to pay for construction and maintenance. Gov. Larry Hogan appointed a board eight years ago that accommodated his desire to lower tolls. It was one of the few ways the Republican governor could deliver promised cuts in taxes and fees a Democrat-dominated legislature couldn’t abide.

Republicans often claim it is easy for “liberal Democrats” at the State House to pass tax increases. Actually it is often quite hard. It took years of pressure and pleading from the late Senate President Mike Miller for the legislature to raise the gas tax 10 years ago. Because it was hard to do, the lawmakers added an inflation adjustment. This has automatically raised gas taxes here to 47 cents per gallon.

Update on the congressional race

As expected, more candidates have filed federal paperwork to raise funds and run for the 3rd Congressional District seat that Rep. John Sarbanes is leaving after nine terms. As of Dec. 15, eight Democrats and two Republicans are on the rolls of the Federal Election Commission, including six Democratic state legislators, though one has already dropped out of the race.

Asked for if he would be another lawmaker joining the race, Budget chair Guzzone, replied with an emphatic, “Hell, no. I won’t be one of them.”

Maryland Sen. Clarence Lam, center, speaks in December at a reception to mark completion of outdoor renovations at the Howard County Welcome Center in Ellicott City. Lam has entered the race for the 3rd Congressional District seat that Rep. John Sarbanes is leaving. (TBM / Jason Whong)

Since the last column, Democratic state Sen. Clarence Lam announced his candidacy. Lam, a Johns Hopkins physician, is a prodigious fundraiser for his state campaign account and the only legislator who represents portions of both Howard and Anne Arundel counties in the district. Lam is currently Senate chair of the Joint Audit Committee and the Joint Committee on state personnel. Del. Terri Hill, who represents the Howard portion of Lam’s 12th District, was already in the race.

Two Anne Arundel County delegates from District 32, Dels. Mark Chang and Mike Rogers, have announced as well. Chang, a risk management consultant, is vice chair of the House Appropriations Committee. Rogers, a retired Army colonel, had the most money in his state campaign account of all the announced candidates– $237,000 — though none of that can be used directly in a federal campaign. 

Other Democrats running are Abigail Diehl, a produce business owner in Annapolis, and Severna Park nurse Kristin Lyman Nabors. Sen. Sarah Elfreth of Annapolis was one of the first to announce her candidacy. Del. Vanessa Atterbeary, chair of the House Ways & Means Committee, has dropped out of the race.

Only two Republicans have announced so far: Berney Flowers, a retired Air Force lieutenant colonel from Howard County, and Jordan Mayo of Annapolis.

Two Republican candidates have filed for the seat with the State Board of Elections, but not yet registered with the Federal Election Commission: Naveed Mian of Elkridge and Rob Steinberger, a lawyer from Arnold.

The filing deadline for Maryland’s May primary is Feb. 9. By then, candidates will also have filed FEC reports that will show who has the big bucks needed to get themselves known in two large counties.