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O'Malley Rolls Out Gas Tax, Highlights Tough Choices

Republicans say governor's tax proposals will hurt the working families he wants to help.

Gov. Martin O'Malley called for legislators to pass a sales tax on gasoline, saying on Wednesday that the decision would be unpopular but much needed.

The governor made his comments in Annapolis during his sixth State of the State speech in which he focused on jobs, taxes and what he called tough choices.

"Asking our fellow citizens to do more will not be popular," O'Malley said. "But without anger, fear or meanness, let’s ask one another: how much less education do we think would be good for our children’s future? How much less education do we want? How much less public safety? How many fewer jobs?  There are costs, and there are values."

Republicans in the General Assembly criticized O'Malley for policies they said will hurt the same middle class working families the governor said he wants to help.

O'Malley described the state of Maryland as strong in his nearly 33-minute address to legislators gathered in the House of Delegates chamber Wednesday.

But at the same time he touted the achievements of his administration over the last six years, O'Malley said that more needs to be done.

O'Malley briefly touched on the gas tax—the most anticipated portion of his message. The governor said a bill would be filed in the next couple days.

"With a growing population and aging infrastructure, we might soon pay an even steeper price," said O'Malley. "Bridges are not like trees. They do not grow broader and stronger with age."

O'Malley's plan calls for phased-in elimination of the 6 percent sales tax exemption on gasoline.

At current prices, opponents estimate that the change would add 18 cents per gallon to the 23 cents in state gas taxes.

The additional revenue would create "7,500 new jobs building needed roads, bridges, and public transit" in Maryland, said O'Malley.

"Now look, I know that every family is still feeling the hurt of this recession," said O'Malley. "The people I serve are the people you serve. I know this is a very, very difficult ask. But nobody else is going to do this for us except for us."

Seeking to increase transportation funding for construction and repair projects that would create jobs, O'Malley intends to submit a bill repealing the sales tax exemption on a gallon of gasoline—phasing it out by 2 percent each year unless the price of gas spikes.

"It's going to be an extremely tough sell," said Senate President Thomas V. Mike Miller Jr., who has advised O'Malley to meet with delegations and various elected officials if he hopes to see the tax increased at all in these difficult times.

Aware that legislators are wary of governors transferring money from the Transportation Trust Fund in order to balance the budget, O'Malley said he would like to safeguard future investments in the fund.

"My understanding is the governor is very receptive to people wanting to protect those funds," said Donald Fry, a former state senator and president and CEO of the Greater Baltimore Committee. "There will be some sort of legally enforceable way to ensure the money in the transportation fund is used for transportation purposes."

Fry is also a member of the Blue Ribbon Commission on Maryland Transportation Funding, which recommended a state constitutional amendment, or "firewall,"to keep those funds from being used for other purposes.

Senate Minority Leader E.J. Pipkin said the so-called "lock box" was a gimmick.

"There are all kinds of gimmicks to get at people's money," said Pipkin, an upper Eastern Shore Republican. "The gas tax is one of the most impactful taxes and working families would have already paid."

"On one hand (O'Malley) talks jobs and on the other hand he kills jobs with higher taxes," he said.

Pipkin said most of the transportation money has gone to fund transit projects that only three percent of state residents use.

"Before we have a discussion about raising taxes we should examine how government spends the money," said Pipkin.

During his speech, O'Malley told legislators he has taken a balanced approach to managing the state's finances during the recession, including making nearly "$800 million in cuts and spending reductions in the current budget. Including those reductions, cuts in state spending total nearly $7.5 billion since O'Malley took office, the governor said.

Critics said those numbers are misleading.

"He's misguiding the public with those words and words mean a lot," said Del. Sue Aumann, a Baltimore County Republican and member of the House Appropriations Committee. "Our budget every year has gone up $1 billion and we have a perpetual deficit of $1 billion."

"The bank of citizens is running dry," Aumann said.

Capital News Service reporters Dave Nyczepir and Mali Krantz contributed to this story.

Tim February 02, 2012 at 05:53 PM
Have a net reduction in budget and then I'll accept that we need to raise taxes to close the gap. The problem in Annapolis is that they keep spending more. Taking from one program but then giving more to others are not cuts. Hopefully this will wake up democrats to look at candidates before blindly casting a vote for the democratic ticket.
Patrick Mondor February 02, 2012 at 06:26 PM
Questions that remain unanswered. Why was the transportation fund raided in the first place that necessitates the need for tax increases? Don't forget we also have been whacked recently with an increases in tolls to apparently pay for our roads as well. Remember the howls from the Democrats in this state when Erlich raised fees in lieu of tax increases (now silence). Since then O'Malley under a Special Session pushed the largest tax increase in state history to close a "structural" budget deficit, raised taxes on alcohol, fees and now this. What do we have to show for it? Still have a deficit over 1 billion dollars. He then has the nerve to cloak all of this under the banner of "its for your children's future". The very group he claims to want to help is the same group that will be crushed by these fiscal policies. Despite all of this he was reelected two years ago by 14 points. Dems know they have this state in the bag and could care less what the opposition thinks (new districts anyone). Frankly, this state is lost....and I mean to those that want a voice and a representative govt. Nothing you say or do will ever change the balance of power in this state. It is a one party state controlled by liberal/progressives that want nothing more than power and your money. Despite early polls indicating almost 3/4 of Marylander's don't want this tax...do you really think they won't implement it? In the end these lemmings will vote Democrat. Very pitiful.
Kaolin February 02, 2012 at 08:47 PM
As with Obama, most Democrats, myself included, are not happy with O'Malley. If the Republicans can put a solid candidate up against him, (s)he'd have all our votes....and with the way our State and Country look right now, it shouldn't be too difficult.
Jim Davis February 02, 2012 at 10:14 PM
"Why was the transportation fund raided in the first place?" Because he needed more money and it had some available. This is the same as any other "Trust Fund" State or Federal. Also he knows that he can always snooker us into paying more to make up for his excesses.
DBCrofton February 02, 2012 at 10:22 PM
I sent two questions to MOM and he has not responded: 1) Where are the budget REDUCTIONS? Because of his higher taxes, I have to cut back alot in my budget. Where are the State of Maryland's REDUCTIONS IN SPENDING? 2) Instead of creating government jobs at the expense of those of us paying taxes, what is his administration doing to BRING BUSINESSES BACK TO MARYLAND??? We need private sector businesses, not taxpayer funded temporary jobs. Does he have a grasp of economics or was he too busy in college playing with the band in bars? I know alot of people that have left the State of Maryland for tax-friendly states. With all this garbage from MOM, the added Federal taxes from BO, I'm shaking my head wondering why we stay in Maryland. Egads! Soon there won't be enough taxpayers left to support this state.
Tea L February 02, 2012 at 11:09 PM
Ever drive to New York on the Jersey Turnpike? Or through countless other roads in other states that cost a small fortune? Let the people who use the roads pay for them like in other places, and those who don't, don't get taxed extra. Oh wait. Stupid me. Maybe that's part of the reason for the gas tax. People who use the roads more maybe should have to pay a disporportionate amount than the people who go out of their way to carpool or walk or bike or take public transportation. Or who just stay home. What a crazy "liberal" idea. Or a libertarian ultra conservative one. What the hell, let's just blame being called upon to pay for infrastructure on the "liberals" and watch some more Fox cable "news". I mean, George Bush never spent money needlessly, never bailed out a company needlessly with billions of taxpayer dollars, did he? Oh, wait.....
Lynn February 03, 2012 at 02:07 PM
No one has mentioned the high cost of illegal immigration in our sanctuary state. CASA (Central American Solidarity Assoc.) gets alot of our tax dollars as well. Who do you think will get most of those jobs building infrastructure? But the Democrats feel they need another "group" besides African Americans and gays to pander to for votes. We are not individuals to them we are groups. Well, when people vote as a group what do you expect? The very few times Republicans have had a chance in this state they continue to "snatch defeat from the jaws of victory" by pushing their RHINO party elites on us in an attempt at being moderate just to get elected. When the people rejected Ehrlich the MD GOP simply had a closed meeting and changed the rules. Didn't work! The number of Independent voters is growing in Maryland for good reason. Now we need candidates with substance. Maryland has the most gerrymandered voting districts in the country so I don't see much hope in changing things. The Unions rule the roost in Annapolis and Annapolis is a plantation. It is entirely up to the electorate to change things...like I said...not much hope,
Brian Lomax February 03, 2012 at 04:35 PM
A 6% tax on gasoline will never pass, and O'Malley knows this. What will eventually happen is more along the lines of 10-15 cent increase. It's a game of politics really. If the tax does eventually go through(and it will go through), it won't be "as bad" as people think it will be. I work in transportation. Given the state of the roads in Maryland(and in the country, as someone above stated when referring to the NJ turnpike), the highway infrastructure is in desperate need for repair. It's the honest reality of the situation. O'Malley(or any politician for that matter) doesn't wake up in the morning wanting to tax people. Maryland hasn't had a gas tax increase since the 1990's. You can't put these things off forever. Politicians can't win. Nobody wants the government to spend any money to fix roads because they're worried about deficits, while nobody wants to pay for roads either. The money has to come from somewhere. I'm a Democrat, and while I'm not exactly thrilled with O'Malley, I don't think he gets credit for the good things he does do. Maryland consistently ranks in the top 10 for places to live in the country, and our public school systems have ranked # 1 in the country for four years running. It can't be nearly as bad as people are saying it is. Does anyone want to pay taxes? No. But you generally get what you pay for. Good roads, schools, hospitals, they cost money. It sucks, but that's how it is.
Joe Robinson February 03, 2012 at 08:38 PM
I could not agree more with you JustABill - and you too Tommy Mims!
Hammbone February 03, 2012 at 08:49 PM
The last time they raised the gas tax ( to the highest in the us at the time ) they told us it was to fix all the roads, and we would never see another tax increase! so, they used the money for other things. How do they get away with it?
Hammbone February 03, 2012 at 09:05 PM
Tell O'Malley what you think. http://www.governor.maryland.gov/mail/
Chet Brewer February 04, 2012 at 12:16 AM
I guess gas taxes are the price of having pretty good roads in the state all things considered. I have lived in low tax states and dealt with the consequences of not funding roads. Raleigh Durham was the all time gem with two lane roads and multi mile backups. It took 40 minutes to commute 6 miles to work. Here I commute 14 miles in 20 minutes or so. Kind of worth it to me
Gambrillsmom February 04, 2012 at 08:49 AM
No one wants to pay more in taxes, but get some perspective--go to the UK or mainland Europe or Asia and take a look at gas prices--many consumers pay more in taxes than we do in total. Or just take a trip up to Canada. The US as a whole is long overdue for a reality check regarding the true cost of our oil consumption. This is a drop in the bucket.
John Thomas February 04, 2012 at 01:28 PM
Brian: Since Maryland schools are ranked # 1 you should try sending your kids to Baltimore City public schools then. Have at it...
cynthia February 04, 2012 at 05:21 PM
John, since you mention Baltimore City schools, did you know that the current governor was mayor of Baltimore City and there was no improvement in those schools, matter of fact, there was a huge amount of money that was lost and never found on his watch. If you want to know more about this, Clarence Mitchell IV, would be able to inform you. Most teenagers in BC schools NEVER graduate.
John Thomas February 04, 2012 at 05:42 PM
Cynthia : My comments to Brian were meant to be facetious...
cynthia February 04, 2012 at 07:22 PM
Yes, John, just didn't know if you knew the past history of the awful governer we have. I was also trying to enlighten Brian, since he admits being a Democrat. I for one, would not mind in the least paying for existing roads being repaired. At least I could benefit from it and see that my tax dollars are being spent in a good way and not wasted. Also, Brian must not know that the Transporation Fund was robbed by the current governor to balance our state budget along with new spending. I just do not see how anyone could even begin to give credit to the governor for the good things he has done. WHAT??? For giving us the largest tax increase in our state's history as well as a 20% increase in the sales tax. The governor was also ranked as the worst governor in America. And let's not forget how many business' have moved or closed down since he has been in his current position. It would be best for us, if he simply played in that band of his fulltime.
Lamarr February 05, 2012 at 02:15 AM
Sir, you obviously don't know about PG county schools. Yeah..the other side of the tracks of Maryland. The black vote is locked up so they don't need to address it because we generally believe everything democrats say without question as long as they paint someone else as a racist.
Lamarr February 05, 2012 at 02:23 AM
Not sure if it's the point you meant to make but this is the "it's not the worst in the world so it must be ok" argument. Not a good way to live. This is America! The land of the free and home of the brave!
Lamarr February 05, 2012 at 02:31 AM
Amen John. Like I mentioned before, it's a black constituent. When "the other guy" is a "racist", we blacks lose our minds, logic goes out the window and nothing else is a priority.
Lamarr February 05, 2012 at 03:00 AM
Everytime I think about the issue of MD being a sanctuary state it absolutely blows my mind. Arizona get's sued by the Feds for enforcing federal laws and Maryland (in the shadow of Washington DC and the Justice Dept) can flippantly thumb it's nose at federal law by declaring Md a sanctuary state?!!! With no response from Washington?? Even if you overlook that, this declaration does nothing but burden the MD taxpayer. How do the people in the state benefit? We already had many of our fellow latino Americans well represented in Md. Everyone knows its for drumming up more votes. Now if MOM will illegally produce votes, cancelling out the dissenting voices, what won't he do??!!! BTW, I hate when they think we're so stupid that whenever need money they bring up the kids, schools, firefighters, police officers, etc. It drives me nuts...
Gambrillsmom February 05, 2012 at 04:34 AM
I don't know if you're intentionally missing the point or what, but this isn't the "could be worse" argument. it's a "wake up and realize the consequences of our actions" argument. The cost of gas and oil is not just what we pay at the pump, and Americans by and large either don't realize it or just don't care. And a "this is AMERICA!!!!" statement adds nothing. Indeed, this is America, and we need to get our act together.
Brian Lomax February 06, 2012 at 11:46 AM
Lamarr, I grew up in PG County, lived there for 16 years. I know all about it. And I disagree wholeheartedly with your last sentence.
Brian Lomax February 06, 2012 at 11:48 AM
John, Don't have any children as I'm only 23, but sending my kids to Baltimore City schools still wouldn't take away from the fact that on the whole, Maryland has the #1 school system in the country would it? Furthermore, I never said our schools were perfect. Of course, there's still work to be done. But there's a lot of good to be found as well.
Brian Lomax February 06, 2012 at 11:49 AM
"Amen John. Like I mentioned before, it's a black constituent. When "the other guy" is a "racist", we blacks lose our minds, logic goes out the window and nothing else is a priority." Goodness.
David Macomber February 07, 2012 at 08:20 PM
Hospitals? Roads? Schools? Maryland has some of the worst roads and they always repave roads that don't need it. And when they do repave a road. There is usually construction of houses or offices near these roads and what do they do? Tear up the new road. Maryland's hospitals need money after over charging you and you insurance company? Schools have portable rooms next to them. Where does all the lottery money go? The stadium authority?Yeah right. I am moving out of this f'ed up state!
Phillip February 07, 2012 at 10:18 PM
You know he just wants the gas tax to be tied to sales tax so that he can then raise the sales tax from 6% to 7%. His administration has done a remarkable job at spending tax payer money. Unemployment is over 8% and he wants to spend more of your money to 'make jobs'. Yeah, just like that Stimulus plan of the President made a lot of long term jobs in Maryland.
Matt Bryant February 11, 2012 at 12:51 PM
Why do politicians think raising taxes is going to help people?? Have they ever thought of lowering taxes or do they know what that means. If we have more money well spend more money. Quit takin money out of our pockets
Wild Bill Cody February 23, 2012 at 01:03 PM
Here's a novel idea...lets reduce the gas tax...and reduce government...in the case of government...less is more...
Phillip February 23, 2012 at 03:28 PM
Dear O'Malley, our President is worried about the price of gas yet YOU continue to push for additional taxes on it. http://www.washingtonpost.com/business/obama-to-discuss-rising-gas-prices-at-florida-event/2012/02/23/gIQA1xgIVR_story.html http://www.reuters.com/article/2012/02/23/us-campaign-obama-gasoline-idUSTRE81M0B920120223

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