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Politics & Government

With More Revenue Lost, Officials Debate Increases to Gas Tax, Registration Fees

County Executive David Craig said that Gov. Martin O'Malley needs to find money elsewhere to balance the budget.

Despite facing more massive cuts in state grants for road repairs, Harford County Executive David Craig said he is against a proposal in the Maryland General Assembly to increase the gas tax and car registration fees.

Craig also said he fears that opposing the measures could cost the county its fair share of highway user funds that he said Harford has budgeted more responsibly than other local governments that support the tax hikes.

“[I’m] opposed to the gas tax increase because that [is] not the solution. The solution [is], stop cutting the funding and using this money to balance the budget,” Craig said. “Previous governors have [balanced the budget without taking from highway user revenues]. We hear no rumors of any of that money ever coming back to us.”

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From fiscal year 2006 to 2009, the state gave Bel Air an average of $578,176 and Harford County $13.6 million in highway user revenue.

In fiscal year 2010 the town’s funds were cut by 83.2 percent to $84,938. The county lost more than 90 percent, receiving only $1,145,318 last year. The town and county are slated to receive just $48,524 and $748,134, respectively, in the current fiscal year, and may not receive any for fiscal year 2012.

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“It’s a massive loss. I’m not convinced that necessarily was not against the way the law was written,” said Craig, who added that a recent increase in gas prices make it an even more unattractive option.

Montgomery County Del. Bill Frick’s House Bill 1001 proposes a 10 percent increase to the state’s 23.5 cent gas tax—unchanged since 1992—and a 50 percent increase to vehicle registration fees. Both would go into effect July 1. The bill projects a net increase of $471.2 million in funding, $96.1 million of which would go to the state’s general fund. But Craig said the 157 municipalities—not all of which receive the funds—and 23 counties would see little of the remaining $375.1 million.

The county executive said he was not surprised that Baltimore Mayor Stephanie Rawlings-Blake, along with the county executives from Howard, Montgomery and Prince George’s counties, spoke in favor of the gas tax increase bill late last month.

“Those three jurisdictions are used to raising taxes as a solution to a problem. That’s their age-old solution, which never works,” Craig said. “It’s like if you’re a parent, you stole the money out of your kid’s piggy bank to go to the movies. At some point you got to stop taking the money out of there.”

Craig is worried that if Harford County lawmakers do not support the bill that the county will be penalized.

“Any governor is going to look at who votes for the gas tax increase when they divide that money up in the projects,” Craig said. “And they’re going to look at Harford County and go, ‘They didn’t vote for it. I’m not giving them any projects.’ So there’s no benefit for us.”

Shaun Adamec, a spokesman for Gov. Martin O’Malley, dismissed Craig’s comments.

“[That’s] suggesting political retribution and it’s really a ridiculous premise,” Adamec wrote in an e-mail. “Over the past four years, the governor has cut state spending by $5.6 billion, with another billion dollars proposed in cuts for FY12.  This has required some very tough decisions not only on the state level, but decisions that impact public employees and local governments.”

Adamec also said that O’Malley has pledged to restore the funds when economic conditions improve.

“[The governor] has said directly to local government leaders that highway user revenues would be the first to be restored when the state has the ability through revenues to do so,” Adamec wrote in an e-mail.

The governor’s office also said it is too early to support a particular bill.

“If we continue to work towards moving our population away from gas-powered cars, then the argument about gas tax revenues may be very different five years from now,” Adamec wrote. “That’s why the details of a gas tax proposal are important to consider. In the end, the governor has an open mind and will wait to see what comes out of the general assembly.”

Town Mayor David Carey is undecided on the bill.

“It all depends on how it’s distributed,” Carey said of the potential additional revenue from a tax and fee increase.

After $39.5 million of highway user revenue funds were allocated statewide in 2009, just $1.6 million is expected to be available this fiscal year. A half-percent of that will be divided among the counties and 0.1 percent among the municipalities, which includes Bel Air. A combined 81.5 percent will go to the Maryland Department of Transportation and the state’s general fund and another 7.9 percent to Baltimore City.

Craig said that precautionary measures taken by the county have softened the blow of the reduced funding, and other local governments across the state may need to consider following suit.

“Harford County was fortunate in that we use the money for capital projects. Unlike many of my sister counties who use the money for operating expenses,” he said. “The unfortunate thing is now is the time to do capital projects because they’re coming in so much cheaper.”

Town of Bel Air Administrator Chris Schlehr said citizens will be hurt the most by a tax increase.

“I’m not sure if that’s the right way to restore the highway user revenues, but the highway user revenues are critical to a lot of municipalities,” he said. “Whether you put that on the shoulders of our citizens by upping the gas tax … it’s robbing Peter to pay Paul.”

One local citizen said the gas tax may be a necessity.

“Is it the least of two evils? Yeah, I’ll accept that,” said Bel Air resident Bob Gledhill, 63, while filling up at Klein's Gas N Go on North Bond Street.

Gledhill also suggested a usage tax for drivers who travel more than 15,000 miles each year for non-business travel. He said it would encourage people to plan their trips more carefully.

“Don’t get me wrong—I don’t want any more taxes than I pay now,” he said. “But if you want road improvements … you can’t keep delaying it.”

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